Centre-right dominate as Socialists regret 'bitter' result

The European Parliament will continue to be dominated by the centre-right for the next five years, but the 736-seat assembly is set to be more fragmented this time round as many small parties made the threshold. The Socialists, who had hoped to make major gains at the polls by way of a backlash against the current economic crisis, kept their second place in parliament, while the Liberals remain in third place.

Joseph Daul, head of the EPP, said he could not be more satisfied with the results, while Liberal leader Graham Watson indicated his faction's showing was in line with what he expected. "That means we will continue to hold the balance between the left and the right, to be the force who determines the outcome of most of the votes and should be able to provide the solid pro-European force at the centre of our House," Mr Watson said.

However the Socialists expressed deep disappointment. Martin Schulz, head of the socialist group, said it was a "very bitter evening" for the party and that they "had hoped for a better result." In Germany, the Social Democrats, a junior partner in the governing coalition, polled 20.8 percent an all time low. Meanwhile, Britain's Labour took a bashing, as did the French Socialists while Italy's conflict-ridden centre-left and Spain's centre-left government also fared poorly. The centre-right maintained its lead in France, Germany and Italy.

Among the main victors are the Greens, who gained in the parliament. In France, the green party (16.2%) were almost at a level with the French Socialists (16.8%). In Germany, they polled in third place (12.1%) ahead of the liberals (11%).

In the United Kingdom

With a turnout of 34.3 percent, the Conservatives obtained 27.7 percent of the votes cast in the elections in Britain on 4 June. The Tories will get 25 seats in the newly elected European Parliament, up from 24 so far, final results showed on Monday (8 June). The British Conservatives have said they will leave the EPP and set up their own anti-federalist grouping.

The European elections in Britain saw the UK Independence Party (UKIP), advocating withdrawal from the EU, scoring its best result ever and coming second to the Tories.

The Labour party of prime minister Gordon Brown, badly hit by the recent scandal over MPs' abuses of the expenses system, only came third at 15.7 percent and lost five of its 18 MEP seats. British media note that it was Labour's worst score since World War II.

Euobserver

Jobboldali erősödés az EP-választások után

A hétvégén lezajlott európai parlamenti választások után jelentősen megerősödtek a jobboldali erők Európában: a Néppárt megerősítette parlamenti pozícióját (267 mandátumot szerzett) a második legnagyobb erőnek, az Európai Szocialisták Pártjának nagy visszaesést kellett elkönyvelnie, ők 159 képviselővel rendelkezhetnek az újonnan összeülő EP-ben.

Az Európai Parlament előzetes, még véglegesnek nem tekinthető összesítése alapján a most megválasztott 736 képviselőből a Néppárt 267 képviselői helyhez jutott, a második legnagyobb frakció, a szocialista párt 159 hellyel rendelkezi majd, míg a liberálisok 81, a zöldek 54 képviselőt küldenek a testületbe.

Eddig 785 képviselő közül a néppártnak 284, az Európai Szocialisták Pártjának 215 képviselője volt. A liberálisok 103, a zöldek 42 hellyel rendelkeztek. A kisebb frakciók közül a jelentős részben euroszkeptikus erőkből álló Unió a Nemzetek Európájáért csoport 35 helyet birtokolhat (eddig 44), míg az Európai Szocialisták Pártján kívüli más baloldali és kommunista pártokat is magában foglaló egyesült baloldal frakciója 34 (41), az uniós együttműködést sok szempontból nem támogató Függetlenség/Demokrácia képviselőcsoport pedig 18 (24) tagra számíthat.

A fennmaradó 88 képviselő kisebb csoportokba tömörülhet, illetve hovatartozásuk egyelőre nem egyértelmű. A részvételi arány 43,1 százalék körüli volt (2004-ben 45,5 százalék), Magyarországról a választójoggal rendelkezők 36,3 százaléka ment el voksolni (legutóbb 38,5 százalék).

Euvonal

Hollandiában már lezárult a szavazás

Hollandiában tegnap, június 4-én járultak az urnákhoz a szavazók. A kormány már ismertette is az eredményeket, melyek azonban még nem tekinthetők véglegesnek.
A holland előzetes eredmények szerint a Geert Wilders vezette szélsőjobboldali párt (PVV) nyerte meg a voksok 17 százalékát, ezzel úgy tűnik, négy helyet szereznek a huszonöt holland székből az Európai Parlamentben. A pártnak korábban nem volt képviselete az EP-ben. „Az embereknek elegük van a mostani Európából: a nagy és költséges Európából, melyben napirenden van egy esetleges török csatlakozás” - kommentálta az eredményeket Geert Wilders. Pártjával a török csatlakozás ellen, és a migrációs politika szigorítása érdekében fognak politizálni, sőt, távoli céljaik közt szerepel az Európai Parlament megszüntetése is. A pártelnök már ismerős lehet sokak számára anti-iszlamista nézeteiről, valamint a Fitna című, nagy botrányt kiváltó dokumentumfilmről, melyben a Koránt vette célpontba. Geert Wilders a film bemutatása óta 24 órás védelemben részesül.
A legtöbb mandátumot a kormánypárti Kereszténydemokrata Tömörülés (CDA) szerzik valószínűleg, akik a szavazatok 20 százalékát kapták, így ők öt mandátumhoz juthatnak az európai törvényhozásban. A voksok 12,2 százalékát kapta meg a jelenleg szintén kormányon lévő Munkapárt (PvdA), akik a legnagyobb veszteséget könyvelhetik el 2004-hez képest: hét képviselő helyett idén valószínűleg csak hármat delegálhatnak. Ez a visszaesés betudható a jelenlegi gazdasági helyzetnek és a Balkenede miniszterelnökkel szemben megerősödött elégedetlenségnek. Az előzetes eredmények alapján a jelentősebb pártok közül a liberálisok (VVD) és a Zöldek három-három, a Keresztény Unió (CU) két képviselővel.
Euvonal

Lithuania set for energy rethink

Lithuania's president-elect says she will push to open up the Baltic state's energy sector, which is still linked to the Soviet-era power grid.

Dalia Grybauskaite achieved an election landslide on Sunday to become Lithuania's first female president. "There is no internal market with electricity - it's very monopolised," Ms Grybauskaite told the BBC.
Asked about relations with Russia, she said she would "keep irritating rhetoric out of my language". Lithuania gets more than 80% of its gas and most of its oil from Russia.

Like its Baltic neighbours, Lithuania has been hit hard by the global economic downturn. Its economy is expected to contract by as much as 15% this year and in January frustration over the crisis escalated into rioting. "I hope to be a stabiliser in this situation," said the president-elect, who will have the right to veto the budget if she so chooses.

Ms Grybauskaite is poised to step down as the European Union's budget commissioner before taking up the presidency.

BBC

Pirates coordinating attacks off Somalia

Searches of captured mother ships operating off the Somali coast have revealed for the first time that pirate gangs are coordinating their attacks against commercial shipping, the commander of the European Union's naval task force said Wednesday. British Rear Admiral Philip Jones said that in recent weeks his flotilla had captured four of the mother ships used to resupply the small pirate speedboats that operate far offshore in the Indian Ocean.

"We do fairly extensive trawls of all the vessels we capture to look for ... evidence we can use to work (out) ourselves what the pirates tactics are," Jones told reporters. The most recent evidence, he said, shows the mother ships are telling each other about potential targets.

The EU flotilla's primary task is escorting ships chartered by the World Food Program to carry food aid to Somalia. In the five months it has been deployed, the flotilla's warships have escorted 23 vessels that have delivered enough food to feed 1.5 million people in the war-ravaged nation. Despite the international naval presence, attacks on commercial shipping off the Somali coast have exploded in the last two months as the pirates have taken to sailing far out into the Indian Ocean to attack vessels beyond the patrol range of the warships.

Jones said he was "bemused" by media reports that the pirates were receiving intelligence on the movement of commercial shipping from sources in the West, adding that the searches of the mother ships had yielded no such evidence.

AP

EU signs deal on new gas pipeline

The European Union has signed an agreement with four countries in a bid to press ahead with a gas pipeline that would reduce its reliance on Russian energy.
Azerbaijan and Egypt, which can both supply gas, and Turkey and Georgia, which are able to carry it, signed up to the Nabucco gas pipeline scheme on Friday at a meeting in Prague, capital of the Czech Republic. In return for their commitment to supply gas to Europe, the EU offered to provide more trade and stronger transport links to the gas producers and transit countries involved.
Three key nations - Kazakhstan, Turkmenistan and Uzbekistan - refused to sign the text, diplomatic sources told the AFP news agency.
Mirek Topolanek, the Czech prime minister, said the aim to open up a "southern corridor" for supplies was "not just a one-way street for pipelines." He said: "We envisage this as a new silk road where we'll see the flow of information, goods, people and energy in both ways."
AlJazeera

ECB package

The European central bank announced a multi-pronged attack on the recession on Thursday (7 May), cutting interest rates by a quarter point and unveiling plans to buy €60 billion worth of bonds held by euro area banks.
But the bank's president, Jean-Claude Trichet, was adamant that the innovative move to buy covered bonds did not constitute quantitative easing, saying the exact details on how the bank will raise the money will be announced next month. Covered bonds have traditionally been considered some of the safest corporate bonds on the market as they are backed by mortgages or public sector loans.
Independently on Thursday, the Bank of England announced it would pump a further €56 billion into the British economy through the purchase of government and corporate bonds. British interest rates remained unchanged however.
The ECB's quarter point interest rates cut bringing the bank's main lending rate to an historic low of just 1 percent. After the news was announced, many commercial banks around the euro area said they would pass the cut onto holders of tracker mortgages, helping reducing monthly mortgage repayments. Others however said they would not be passing the cut on, claiming instead that they wished to protect individuals opting to save.
Showing new signs of flexibility, Mr Trichet did not rule out the possibility of a further interest rate cut, marking a departure from previous statements in which he indicated 1 percent was the lowest the bank would go. While euro area rates have reached a new record low, they are still higher than those in the US which currently hover in a band between 0 - 0.25 percent. Both Britain and Japan also have lower rates on 0.5 percent and 0.1 percent respectively.
In a further measure, the ECB announced it would extend its lending period to banks from 6 to 12 months and would starting lending to the European Investment Bank for the first time. The European Investment Bank was set up by the 1958 Treaty of Rome, with the aim of lending money of support EU policy objectives especially the financing of projects in poorer regions. The news should bring some cheer to Eastern Europe that has been particularly badly hit by the crisis.
The comprehensive package of measures announced on Thursday is more than many analysts had anticipated and reflect the ECB's gloomy assessment of the current economic situation. Mr Trichet said the first quarter of 2009 had been "very bad" and that the bank would revise down it growth forecasts next month.
Eurobserver

Unemployment in Spain Hits 17.4%

The number of unemployed people in Spain rose to a record four million in the first quarter as the economy continued to shed jobs created over the last decade by inexpensive credit and a real estate bubble.
he Spanish unemployment rate climbed to 17.4 percent, from 13.9 percent in the final quarter of 2008, or more than twice the EU average, the National Statistics Institute said Friday. The 802,800 increase in the ranks of the jobless was the largest quarterly increase in more than 30 years.
The Bank of Spain has warned of little room for additional spending, with Spain’s public sector deficit on track to hit 8.3 percent of G.D.P. this year and its ratio of debt-to-G.D.P. set to reach 50 percent. The bank’s governor, Miguel Fernández Ordóñez has said that the social security system could go into deficit this year.
New York Times

Nationalists sweep to victory in northern Cyprus poll

Efforts to reunify the divided island of Cyprus could be complicated by an election result in the breakaway north. Turkish Cypriot nationalists have been celebrating a decisive victory in the parliamentary poll.
Their National Unity Party, led by Dervis Eroglu, has pledged to pursue talks aimed at finding a settlement. But it has advocated an outright two-state solution to the Cyprus question. And that is at odds with the federal model being discussed in peace talks that Turkish Cypriot leader Mehmet Ali Talat launched with Greek Cypriots last year.
He retains his position despite the outcome of Sunday’s vote. But his room for manoeuvre in trying to reunite the island could be limited, with his political rivals now dominant in the territory’s parliament. The internationally-recognized Greek Cypriot government in the south represents Cyprus in the European Union. Only Turkey recognises the Turkish Cypriot territory. And, as long as the island remains divided, Greek Cypriots say they will block Turkey’s admission to the EU.
Euronews.net

Hungary's economy to shrink by up to 6 pct in 2009

Hungary's new prime minister said Sunday that the country's economy would contract by as much as 6 percent this year, making new budget cutbacks and reforms necessary to keep the state budget in balance. Prime Minister Gordon Bajnai said that if the government's planned reforms and austerity measures were not introduced soon, Hungary could face a prolonged economic crisis.
A heavy reliance on foreign investors to finance the state budget, a large proportion of home- and car owners with debts in foreign currencies, especially the Swiss franc and the euro, and an engorged welfare system have made Hungary among the countries in Eastern Europe most affected the global economic slump.
Bajnai was sworn in Tuesday after parliament elected him to replace Ferenc Gyurcsany, who resigned last month amid Hungary's deepest crisis since the end of communism nearly 20 years ago. Bajnai said he was taking the job at most until elections are held in April or May 2010 and would not seek to run again for office.
While the last official forecast expected gross domestic product to fall by as much as 3.5 percent, Bajnai said the depth of the global economic crisis was having increased effects on Hungary, which relies heavily on markets like Germany for its exports. Bajnai said it was time for all Hungarians to "cry together and laugh together," by, for example, expanding the tax base and increasing the proportion of those working as opposed to living on social welfare.
Bajnai said that among the decisions taken by the Cabinet were to lower payroll taxes to first preserve jobs and later hopefully increase the number of workplaces, raise the value-added tax to 25 percent from 20 percent, and temporarily eliminate extra pension payments and automatic annual bonuses for public employees.
He also announced plans to raise the retirement age gradually to 65 from 62, freeze some social welfare payments, eliminate energy subsidies for homeowners, introduce a real estate tax burdening especially the more valuable properties, lower expenditures on state-owned media, reform and cut subsidies for agricultural producers and simply the tax code.
The government also was planning to expand the personal income tax brackets so that around 90 percent of taxpayers would fall into the lowest category, the prime minister announced. Bajnai said his "crisis-management" government's aim was to help Hungary soon reach an annual growth rate 2 percentage points above the European Union average and meet the economic criteria needed to change the currency from the forint to the euro.
AP

Moldova accuses Romania of staging riots

Moldovan president Vladimir Voronin has blamed EU neighbour Romania for staging post-election riots and announced he would expel Bucharest's ambassador and reintroduce visas for Romanians. Some 2,000 protesters were gathering for the third day on Wednesday (8 April) in Chisinau, after police took over the control of the parliament and presidential palace a night before.
Mr Voronin decided to expel the Romanian ambassador and reintroduce mandatory visas for his neighbours, despite a visa facilitation agreement with the EU. Under the agreement, Chisinau lifted visas for all EU member states at the end of 2007, including for the EU's newest members Romania and Bulgaria. Moldovan authorities also interrupted the broadcasting of Romanian TV channels on cable networks, which were the only ones reporting live on the events.
Russian support for the current government
Russian interests are still very much present, as the separatist region of Transnistria, in Moldova's eastern part bordering Ukraine, is home to some 2,000 Russian troops and military equipment. Russia's foreign ministry, in a statement on Wednesday, said the riots were a plot aimed at undermining Moldova's sovereignty and pointed the finger to forces which favour a reunion with Romania. Russian President Dmitry Medvedev, who had earlier congratulated Mr Voronin on his party's election win, called for a speedy and calm resolution of the crisis.
Some representatives of Moldovan civil society were disappointed at the EU's reaction and the OSCE judgement that the Sunday elections were free and fair.
"The declarations of OSCE observers and EU officials calling the elections fair proved that the EU feels nausea about the Republic of Moldova. These statements untied the hands of the Voronin regime," Oazu Nantoi from the Institute for Public Policy, a Chisinau-based think-tank, told EUobserver. He said that the elections were grossly manipulated by the state institutions, who only serve the Communist party and its leader. Mr Nantoi, who participated in the demonstrations from the first day on, said that on Monday, people gathered spontaneously, protesting peacefully about the Communist leadership.
Euobserver

Czech MPs oust government in vote

The Czech Republic's centre-right minority government has lost a vote of no-confidence midway through the country's six-month EU presidency. Four rebel MPs voted with the opposition Social Democrats and Communists against PM Mirek Topolanek.

Mr Topolanek said he would step down, but correspondents say it is unclear how long he will remain in the post. The European Commission said it was confident the Czech Republic could continue its EU role effectively. Social Democrat leader Jiri Paroubek said ahead of the vote that the government could "complete the Czech EU presidency or its substantial part".

Tuesday's no-confidence vote in the lower house followed accusations that one of Mr Topolanek's advisers had attempted to pressure its public TV channel into dropping a programme critical of a former Social Democratic MP who had decided to back the coalition.

The BBC's Rob Cameron in Prague says this surprise result, which threw observers completely off guard, could have far-reaching consequences beyond the country's borders. In addition to chairing the European Council, the Czech Republic is also in the middle of ratifying the Lisbon Treaty and is in talks with the United States on placing a radar base on Czech soil. All these important foreign policy initiatives are now thrown into doubt, our correspondent adds.

(BBC)

Hungary Seeks New Premier to Fight Economic Crisis

Hungary’s ruling Socialists began hunting for a new premier to tackle the economic and financial crisis after Ferenc Gyurcsany said he will quit with the nation mired in its worst recession in at least 16 years.

His successor, who will need opposition support, would be elected on April 14 by parliament, Gyurcsany, who heads a minority administration, said yesterday. Talks with rival parties are under way. The new Cabinet will have a year to repair Hungary’s finances before the next scheduled elections.

Gyurcsany told his party’s congress on March 21 that he is willing to resign to allow the formation of a “new government with the leadership of a new prime minister.” He didn’t name a preferred successor. Gyurcsany told parliament today that his decision to quit as premier was “final and irrevocable.”

Even as he presided over a reduction of the budget deficit from 9.2 percent of GDP in 2006 to about 3.3 percent last year, Gyurcsany was criticized in February by some opposition parties and the central bank for his proposed 900 billion forint ($4.1 billion) tax shuffle to boost growth. Critics said more spending cuts were needed to stabilize the economy in the short run and boost growth in the long run.

The Socialist Party is less than half as popular as its biggest rival. Backing for the government started slipping when it introduced austerity measures to close a budget gap in 2006. The resulting economic decline was worsened by the global crisis, forcing the country to seek international aid. The party had 23 percent support last month, the lowest in 10 years, compared with 62 percent for the largest opposition party, Fidesz, pollster Median said on its Web site on March 18. Gyurcsany’s popularity fell to 18 percent, making him the most unpopular premier since communism. The poll of 1,200 people has a margin of error of 2 to 6 percentage points.

(Bloomberg)

Jóváhagyták az 5 milliárd eurós beruházási csomagot

Három hónapos huzavona után tegnap este az uniós csúcson a tagállamok vezetői megegyeztek a források felhasználásának feltételeiről, és jóváhagyták a Bizottság 5 milliárd eurós beruházási programcsomagját. A csomag elsősorban energiaügyi és távközlési beruházások finanszírozásával kívánja élénkíteni a gazdaságot a tagállamokban.

„Sikerült közös nevezőre jutnunk az energiaügyi, távközlési és vidékfejlesztési beruházásokat tartalmazó infrastruktúra-fejlesztő csomag összetételéről” - nyilatkozta Mirek Topolanek cseh miniszterelnök a tárgyalásokat követő sajtótájékoztatón.
A megegyezés úgy születhetett meg, hogy a vezetők elfogadták Németország arra irányuló kérelmét, hogy a finanszírozás csak két évig tartson. A kész megállapodás szövegébe beültetendő úgynevezett „naplemente záradék”, azt hivatott szolgálni, hogy azok a projektek, amik 2010 végéig nem állnak készen a megvalósításra, már ne jussanak uniós pénzhez. A nagyszabású uniós gazdaságélénkítési csomag legfontosabb elemeit az előző költségvetési évben fel nem használt uniós pénzekből finanszírozzák.
A listán négy, Magyarországot közvetlenül érintő beruházás szerepel, az eddigi egyeztetések nyomán szlovákiai, romániai, és horvátországi gázhálózat-összeköttetéseinkre valamint a Bécs és Győr közötti elektromos rendszer korszerűsítésére kapnánk uniós támogatást, így az egyik legnagyobb kedvezményezetté válva. A lista tartalmazza a Nabucco gázvezeték-beruházás támogatását is, azzal a feltétellel, hogy a támogatandó fázisok a jövő év végéig a megvalósítás szakaszába lépnek.
Euvonal

Elhagyják az Európai Néppártot a toryk

A brit Konzervatív Párt tegnap hivatalosan is megerősítette kilépési szándékát a legnagyobb jobbközép pártokat tömörítő európai parlamenti frakcióból, az Európai Néppártból. Erre valószínűleg még az EP-választások előtt sor kerül, és júliusban valószínűleg új frakciót alapítanak az EP-ben, Európai Konzervatívok néven.

A BBC beszámolója szerint a toryk brit árnyékkormányának EU minisztere, Mark Francois és külügyminisztere, William Hague, valamint európai parlamenti vezetőjük, Timothy Kirkhope tegnap közösen látogatta meg Joseph Dault, az Európai Néppárt és Európai Demokraták elnökét Strasbourgban, hogy személyesen tájékoztassák terveikről.
A toryk hazai vezetője, David Cameron már a 2005-ös pártelnöki választáson azzal kampányolt, hogy megválasztása esetén kivezeti az – igencsak euroszkeptikus, de nem feltétlen integráció-ellenes szavazótáborral rendelkező - pártot a kereszténydemokrata többségű, meglehetősen föderalista nézetű képviselőcsoportból. Az képviselők európai párthoz fűződő viszonyát végül a Lisszaboni Szerződés körüli ellentmondás mérgesítette el annyira, hogy a britek magukra vállalják a kilépést követő jelentős befolyásvesztést az európai döntéshozatalban.
Euvonal

Újabb kamatcsökkentés

Az Európai Központi Bank csütörtökön (március 5.) fél százalékponttal, 1,5 százalékra csökkentette irányadó kamatát, mely az euró 1999-es bevezetése óta a legalacsonyabb alapkamat.
Múlt év októbere óta a tegnapi kamatdöntéssel együtt az EKB már 2,75 százalékponttal szállította le alapkamatát annak érdekében, hogy a pénzügyi válság miatt lelassult európai gazdaságot élénkítse. A döntést követő sajtóértekezleten Jean-Claude Trichet, az EKB elnöke nem zárkózott el további kamatvágástól sem, de megerősítette korábbi véleményét, miszerint a zérókamat-politkát nem tartja előnyösnek. Az EKB a 2009-es és 2010-es infláció alakulását a visszaeső fogyasztói kereslet és a csökkenő árak miatt két százalék alá várják.

Germany rejects bailout plan for east EU nations

Germany rejected appeals Sunday for a single multibillion euro (dollar) bailout of eastern Europe, even after Hungary begged EU leaders not to let a new "Iron Curtain" divide the continent into rich and poor.

The swift, strong comments by German Chancellor Angela Merkel dampened hopes that leaders at Sunday's European Union summit could forge a unified stance to tackle the worsening economic crisis. As Europe's largest economy, Germany has been under rising pressure to take the lead in rescuing eastern EU members, but Merkel insisted that a one-size-fits-all bailout was unwise. "Saying that the situation is the same for all central and eastern European states, I don't see that," said Merkel, adding "you cannot compare" the dire situation in Hungary with that of other countries.

Hungarian Prime Minister Ferenc Gyurcsany, saying the credit crunch was hitting the eastern members hardest, had called for an EU fund of up to euro190 billion ($241 billion) to help restore trust and solvency in those nations. "We should not allow that a new Iron Curtain should be set up and divide Europe," Gyurcsany told reporters. "In the beginning of the nineties we reunified Europe, now the challenge is whether we will be able to reunify Europe financially."

EU nations are all grappling with a worsening recession, compounded by a severe credit crunch that has left many EU countries looking ever more inward to protect jobs and companies from international competition. Those policies are now undermining the open market cornerstone on which the EU is founded.

Ahead of the summit, the leaders of nine countries — Poland, Hungary, Slovakia, the Czech Republic, Bulgaria, Romania and the three Baltic states — forged a common stand to pressure richer members in the 27-nation bloc to back up vague pledges of support with action. Polish Prime Minister Donald Tusk said the nine leaders called for "a spirit against protectionism and egoism."Hungary, Poland and the Baltic countries of Estonia, Latvia and Lithuania also want the EU to fast-track their bids to join the euro-currency, which could offer them a stable financial anchor. Latvia's government has already collapsed amid the economic fallout. Other EU members, like Sweden, want to coordinate a Europe-wide bailout plan for car producers. Prime Minister Mirek Topolanek of the Czech Republic, which holds the EU presidency, has called on his counterparts to act together.

A draft summit conclusion centered a commitment to "make the maximum possible use" of the EU's cherished free market "as the engine for recovery".
The crisis has sorely tested solidarity among EU nations. The Czech Republic has accused France of trying to protect its local car plants at the expense of foreign subsidiaries, while Germany rejected earlier calls to help bail out economies in Ireland, Greece and Portugal.

Sunday's talks are meant to restore a unified purpose and help prepare for the April 2 Group of 20 nations summit in London. Once-booming east European economies have been hit hard by the economic downturn. As cheap credit dried up their export markets shrank, causing eastern currencies to sink and triggering more financial turmoil.

Gyurcsany said eastern EU countries could need up to euro300 billion ($380 billion), or 30 percent of the region's gross domestic production this year. He warned that failure to offer bigger bailouts "could lead to massive contractions" in their economies and lead to "large-scale defaults" that would affect Europe as a whole. It could also trigger political unrest and immigration pressures as jobless rates soar, he said. EU governments have already spent euro300 billion ($380 billion) in bank recapitalizations and put up euro2.5 trillion ($3.18 trillion) to guarantee loans of many banks in the EU and neighboring states.

On Friday, the European Bank of Reconstruction and Development, the European Investment Bank and the World Bank said they will jointly provide euro24.5 billion ($31.1 billion) in emergency aid to shore up the battered finances of eastern European nations.

Associated Press

Latvian government falls, president seeks new PM

Latvia's four-party ruling coalition collapsed on Friday and the president called for talks to forge a new government to tackle a deepening economic crisis.
The coalition's fall, the second European government to succumb to the financial crisis, adds to the economic problems of the small Baltic state, which last year had to take a 7.5 billion euro ($9.43 billion) IMF-led rescue loan last year.
Political and social tensions exploded in January into a riot, though there has been little sign of a repeat in Latvia, a European Union and NATO member since 2004. The political crisis struck as a team from the International Monetary Fund visited Latvia.
Reuters

Europe’s Economy Contracts Most in at Least 13 Years

Europe’s economy contracted the most in at least 13 years in the fourth quarter, compounding pressure on the European Central Bank to reduce interest rates to the lowest ever next month.
Gross domestic product in the euro region declined 1.5 percent from the previous three months, the European Union’s statistics office in Luxembourg said today. That was more than the 1.3 percent economists expected and the most since euro-area GDP records began in 1995. From a year earlier, GDP fell 1.2 percent in the fourth quarter, the only full-year drop on record.
Europe recorded the biggest trade deficit in 2008 since the euro’s introduction 10 years ago as higher oil prices boosted energy costs and the global financial crisis curtailed exports.
The region’s trade deficit of 32.1 billion euros ($40.5 billion) compared with a surplus of 15.8 billion euros in 2007, the European Union’s statistics office in Luxembourg said today.
The spreading of the global recession is curbing demand for European products, adding to pressure on the economy, which shrank the most in 15 years in the fourth quarter. Volkswagen AG, Europe’s largest carmaker, said deliveries fell about 20 percent last month and that sales in the export markets of Brazil, Russia, India and China have been “particularly hit” by the credit freeze.
Exports to the U.S., the second-biggest buyer of euro area goods, fell 5 percent in the 11 months through November from a year earlier. Sales to the U.K., the main destination for the region’s products, dropped 3 percent. Detailed data are published with a one-month lag.
Sales to China rose 10 percent in the 11-month period, slower than the 15 percent pace recorded in the first half of the year. Exports to Russia grew 16 percent, compared with 20 percent in the first half.
“In past years, investments in China, India and the Middle East led to strong demand for European capital goods,” said Carsten Brzeski, an economist at ING Groep NV in Brussels. “That demand has collapsed” and “will continue in the next months if you look at the new orders.” Bloomberg

A klinikai halál állapotában Lettország

Kutyaszorítóban a lett kormány, aki a pénzügyi válság kellős közepén hiába ütött nyélbe az EU-val és a Világbankkal egy szerződést 7,5 milliárd eurós hitelről, annak feltételéül szabott megszorítások miatt mindennaposak a tüntetések, a gazdasági zsugorodás idén kétszámjegyű lehet, és még jövőre is folytatódni fog a visszaesés.

Ivars Godmanis lett miniszterelnök és kormánya túlélte a bizalmi szavazást, miután a gazdatüntetések miatt lemondott mezőgazdasági minisztere. Az ország 1991-es függetlenné válása óta a legsúlyosabb helyzetben van. A gazdák traktorokkal vonultak fel Rigában, azt követelve, hogy részesítsék őket kárpótlásban jövedelmük csökkenése miatt.

A lett fővárosban egymást követik a tüntetések, az emberek a kormányt tartják felelősnek a válság nem megfelelő kezeléséért. A baj csak az, hogy senki sem tudja, mit lehet tenni. Rigának sikerült egy 7,5 milliárd eurós Világbank-EU hitelt kapni a stabilizáláshoz, de ennek feltételei - az adók emelése és a költségvetési kiadások drasztikus csökkentése - elfújták a kormány népszerűségét. Az áfát 18-ról 21 százalékra vitték fel.

Az éveken át Európa leggyorsabban növekvő gazdaságai közé tartozó Lettország a túlhevülés határán járó fejlődés után zuhant a mélybe. A Svedbank, a baltikumi térség legnagyobb hitelezője szerint idén valószínűleg 10 százalékkal csökken a bruttó hazai termék, és még jövőre is 2 százalékos zsugorodással számolnak. Ilmars Rimsevics, a Bank of Latvia elnöke szerint az ország a klinikai halál állapotában van, amikor csak néhány perc lehetőség van az újraélesztésre. Televíziós interjújában kifejtette, hogy ennek eszköze csak a hitelezés jelentős élénkítése lehet.

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