EU Leaders Urge More Funds to Fight Global Economic Crisis

By Lisa Bryant

Paris
20 March 2009

European leaders meeting in Brussels have agreed to add more than $150 billion in additional support to the International Monetary Fund and struggling eastern European countries. The pledge came Friday at the end of a two day summit.

European Union leaders wrapped up their summit in Brussels with no surprises. They were not expected to agree to plow more money into their own economies to battle the financial crisis -- and they did not.

They were expected to agree to increase funds to help the International Monetary Fund and Eastern EU members to deal with the financial crisis and they did.

The 27-member bloc agreed to double loans available to eastern European countries to $68 billion and to contribute about $100 billion to the IMF as part of an overall funding increase so the institution can help countries worldwide battle the economic downturn.

European Commission head Jose Manuel Barroso hailed what he called Europe's common approach to battling the crisis ahead of the G-20 meeting in London of top world economies in early April. The Brussels meeting wasn't just talk, he told reporters, but achieved concrete results.

"It was five billion euros in additional money for the interconnection to Europe. It was the decision to double our financial facility to support balance of payments in countries that might need support their balance of payments from 25 billion to 50 billion (euros), it was a decision to put more resources for the IMF. So I am not just talking about agreement in principle but concrete results regarding spending and solidarity," he said.

But those decisions also leave Europe at odds with the Obama administration, which has pushed European countries to spend more on domestic economic stimulus plans. And while Europe wants to double the IMF's resources to $500 billion, Washington is pushing for a higher increase of $750 billion.

Separately, EU leaders backed boosting aid to six former Soviet states by about $800 million. But they refused to commit themselves to a figure on helping developing nations battle climate change, saying they would wait to see what other countries offered first.