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European Solidarity under test

The European answer to the crisis is inadequate

Barack Obama gained approval for his economic recovery plan: 620 billion euros ie 6% of the GDP. The Chinese have committed 460 billion ie 7%.

The European plans added together have difficulty in rising to 280 billion, ie 1% of the GDP. The European response to the crisis is inadequate.

Everyone is acting alone convinced that only the national dimension will lead to the best adapted response. 

The European institutions, with the exception of the Central Bank, have underestimated the storm and have not produced a single idea that will foster dialogue and mobilise all the forces it has at its disposition.

Some Member States have lost their rating on the markets and are having to pay more for their loans.

And now the newest Member States, as forecast, are now being affected by the recession. 

The IMF has had to intervene in Latvia and Hungary. The first European government to fall because of the crisis handed in its resignation in Riga on 20th February.

Others will come.

Banks everywhere have been weakened, currencies are under siege and debts are reaching heights never seen before; activity is slowing.

In these countries, which are just catching up and where until now, there has been strong growth, there is no safety net of wealth to guarantee the loans necessary to face the crisis.

Elsewhere, everywhere the States' debts are increasing and confidence is being undermined.

European solidarity will quickly be put to a severe test. It cannot be satisfied with tentative progress made at the G20 in London.

Only a global answer, Europe wide, will really be effective.

In all likelihood this will require exceptional measures and the rules applied in calmer times will have to be stretched.

Weakened banking systems will have to receive guarantees to avoid their collapse; non-members of the Euro Area will require support and help will be need from Brussels for an effective recovery of the economy.

The Union must be able to borrow to satisfy these requirements. It will have to accelerate the payment of structural funds that are so slow in being deployed and mobilise all possible means to help those who need it.

We have to save the single market and help Europeans in the field. 

This requires much more imagination than the Commission is capable of. Member States must now come up with specific European tools and turn European solidarity into a reality.

The Central Bank has to be aided by increasing its prerogatives as financial regulator and prudential controller. Under the control of the European Parliament the Commission should possibly be obliged to release the funds planned for investment in the Member States.

Finally the latter should not adopt any more purely national support plans without prior dialogue.