Europe Needs to Devise Single Position on Financial Crisis Solution: Expert

Business Materials 6 October 2008 18:41 (UTC +04:00)
Europe Needs to Devise Single Position on Financial Crisis Solution: Expert

Azerbaijan, Baku, 6 October /corr. Trend A.Badalova / As a result of meeting of State Heads of the European Union last week in Paris, a decision was made not to provide joint assistance to the banks suffering the credit problem.    

One of the basic tasks of the meeting initiated by the President of France, Nicolas Sarkozy, became the coordination of the common position of the European powers on resistance against the negative economic tendencies in the world. The summit was also attended by the Prime Minister of Great Britain, Gordon Brown, Chancellor of Germany, Angela Merkel and the Head of the Italian Government by Silvio Berlusconi.

The governments of the EU countries adhered to different positions concerning the measures for regulating the financial crisis. Mostly, the differences were observed around the question of establishment of reserve fund.

By the beginning of the summit, the Prime Minister of Great Britain, Gordon Brown, proposed to provide $21.2bln aid to small business from the European Investment Bank. French Minister of Finance also made an idea to establish a stabilizing all-European Fund in ї400bln. However, according to the Head of the European Central Bank, Jean-Claude Trichet, due to absence of Federal budget in the European Union, all-European solution of the existing problems will not be able to yield results.

As a result of the summit, the heads of government agreed to combat the financial crisis with own forces, coordinating their actions.

The day before, the U.S. Congress approved the plan on rescuing of the financial sector of the country by allocating $700bln for the ransom of the problematic assets of the banks.

According to the economist of UniCredit AtonCompany that is part of the international financial group UniCredit Group, Vladimir Osakovsky, currently Europe needs to devise a united position on the solution of the financial crisis.

їThe meeting yielded certain positive results. But the issue of how all these will be realized is an open question,ї Osakovsky told Trend by telephone.  

According to him, the combined actions of the big European states provide a share of optimism, which is very important at the present time.

їHowever, it is difficult to say what mechanisms will be specifically devised and how this will appear in the final result,ї Osakovsky said.

Speaking of the situation in Europe, the economist said that the problems in the region can be compared with the American.

їHowever, in general the share of the stability is observed in the gross European economy. Some countries will suffer more, some less,ї he added.

Amongst the measures for mitigating the consequences of the economic crisis, the President of France Nicolas Sarkozy mentioned the upcoming introduction of sanctions with respect to the managements of the banks, which were proven to be unable to independently manage the appearing difficulties.
Furthermore, the joint statement of the summit participants called upon the members G8 to re-consider the rules of regulating the financial markets next week.

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