EU leaders have been forced to fight a crisis on two fronts at their midyear summit that began yesterday, as soaring food and fuel prices threaten economic gloom and social unrest, even as Ireland’s rejection of a key treaty plunges the bloc’s political plans into turmoil.
Protesting Belgian farmers, taxi drivers and truckers besieged EU headquarters on the eve of the summit on Wednesday, shutting down much of Brussels in the latest wave of demonstrations from Germany to Portugal over record oil prices and the highest inflation in a decade.
“Everyone is feeling the pressure of price rises on food and fuel,” European Commission President Jose Manuel Barroso said.
“We need to take a dynamic and imaginative look at the tools at our disposal,” Barroso said.
However, the 27 EU leaders are unlikely to back a French call for cuts in fuel taxes to calm the protesters. The fear is that cuts in fuel taxes could push up oil consumption, leading to yet higher prices and undermining efforts to cut greenhouse gas emissions.
“It would be futile for governments to use public money to offset energy price rises that are here most likely to stay,” Barroso told the European Parliament in Strasbourg.
EU leaders had been hoping to concentrate on the economy during the summit yesterday and today, including long-term ideas that would lessen their reliance on volatile oil imports, cut energy consumption and boost agricultural production to rein in food prices.
However, last week’s Irish referendum vote that rejected the Lisbon treaty means they must focus again on the EU’s institutional woes.
The treaty — the result of years of painstaking negotiations — was designed to overhaul the way the EU works and underpin plans to further expand the EU into the Balkans and perhaps beyond.
However, the only country to submit the text to a popular vote rejected it, derailing plans to create a potentially powerful new president and foreign chief by the end of this year.
Ireland’s “no” vote followed approvals of treaty by parliaments in 18 of the EU nations. Britain’s parliament gave its final backing to the treaty on Wednesday and the leaders are expected to agree that the remaining seven countries will press ahead with their own ratification to leave Ireland isolated — although the Czechs are having their own doubts.
Even if the others all ratify it, there is little clear vision on how to proceed beyond a common desire to avoid another prolonged bout of introspection.
“Issues such as climate change and energy security, migration and terrorism, won’t stand still while we wring our hands about the EU’s internal structures,” British Foreign Secretary David Miliband said ahead of the meeting.
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