Global Economics

EU Leaders O.K. Energy, Internet Projects


Meeting in Brussels, officials reached agreement in principle on allocating $6.8 billion for infrastructure upgrades to boost economic recovery

EU leaders on Thursday night put an end to a three-month long haggle over energy, broadband and agricultural projects worth €5 billion, finally agreeing the terms and the conditions for spending the funds, part of the EU's economic recovery plan.

"We have reached an agreement in principle on the allocation of this infrastructure recovery plan—gas, oil, energy infrastructure, broadband and rural development. We'll be carrying out projects in 2009 and 2010, with finance mechanisms that are sufficiently transparent," Czech Prime Minister Mirek Topolanek told a press conference after the first day of the meeting of heads of state and government.

The deal could only be reached by accepting a demand by Germany that the funding would only run for two years. A 'sunset clause' is to be attached under which all other projects that are not ready to go by the end of 2010 are not eligible for funding.

Commission president Jose Manuel Barroso was visibly relieved to see an agreement following months of criticism from member states over the idea of the fund and the amounts allocated to each member state.

Initially, the commission had proposed to use €5 billion of unspent money from 2008, but the idea was abandoned after protests from big EU donors like Germany who under EU law get the unspent community money back to the national budget.

Top-up to €50 billion for Eastern Europeans

EU leaders are set to discuss on Friday morning the possibility to double the rescue fund for Eastern European countries, currently at €25 billion, and which has already been tapped by Hungary and Latvia as part of their EU-IMF bailouts. New EU member state Romania has also applied for joint funding, the figure floated so far being €20 billion.

Ukraine, which has received an IMF-only loan, has been actively pleading for the EU fund to be opened up for the bloc's neighbours as well, and not just its members, as it is currently the case.

Both Mr Topolanek and Mr Barroso said money could be made available to "whomever needs it", as the EU would also support a doubling of the IMF funds—a position agreed by EU leaders in the view of the G20 summit in London.

Another item on the Friday agenda is climate change in preparation for the UN conference in Copenhagen, aimed at striking a new global deal on reducing CO2 emissions.

Martian intermezzo

The otherwise technical press conference was interrupted by a question from a French female journalist saying that "I see six men sitting behind the podium. Is that what Europe is like?"

Mr Topolanek promptly answered, in Czech: "What did you expect—Martians?" His remark was followed by Czech finance minister Miroslav Kalousek who added: "I am a bit of a feminist myself."

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