The heads of Europe’s biggest economies met yesterday to try and forge a common position on the global financial crisis despite simmering disagreements over the way forward.
The British, French, Italian, Spanish and Dutch leaders gathered in the German capital to hammer out a European stance to take to a summit of the G20 developed and major developing countries in London on April 2.
The Berlin meeting came at the end of a week in which the economic crisis focused on central and eastern Europe, raising fears over the potential fallout among highly exposed banks in western Europe.
Squabbles over protectionism could also hinder efforts to present a united European front, with the European Commission voicing concern over proposed plans by France, Italy and Spain to shield their ailing auto sectors.
But French President Nicolas Sarkozy said he would not accept “a weak compromise, a cheap fix” in establishing the European position at the meeting hosted by German Chancellor Angela Merkel.
“The violence of the [economic] crisis, its depth, call for really profound changes. We have to start capitalism again from scratch, make it more moral ... that is why I want to see a real response [in Berlin],” Sarkozy said.
Merkel too turned up the heat ahead of the meeting, calling on Saturday for regulations and oversight of financial markets to be reinforced.
“There should be no more gaps” in international controls of financial products, the head of Europe’s largest economy said in her weekly video message.
Germany is pushing to reinforce rules for hedge funds and better rating systems to avoid repeats of meltdowns in the future.
German officials have also signaled their determination to have “exit strategies” ready for when the crisis begins to abate.
European officials suspect Britain’s resolve to tighten the regulation of markets may be waning, with London concerned that its position as Europe’s preeminent financial center could be undermined.
But British Prime Minister Gordon Brown said last week the world would see “unprecedented cooperation” over the next few months in addressing the financial crisis.
In a comment piece in The Observer yesterday, Brown called for a “reformed and more responsible banking system.”
“Banks must act in the long-term interests of their shareholders and therefore of the economy as a whole, not in the short-term interests of bankers,” Brown said. “That has to be the foundation on which a new system must be based.”
He advocated a rejection of “short-term bonus culture,” stronger governance in banks and better national and international regulation.
US President Barack Obama’s US$787 billion stimulus plan to jump-start the US economy has also raised fears in some European quarters over protectionism.
In public, European leaders are poised to repeat a commitment to avoid resorting to protectionism as a response to the world financial crisis.
In his National Day Rally speech on Sunday, Singaporean Prime Minister Lawrence Wong (黃循財) quoted the Taiwanese song One Small Umbrella (一支小雨傘) to describe his nation’s situation. Wong’s use of such a song shows Singapore’s familiarity with Taiwan’s culture and is a perfect reflection of exchanges between the two nations, Representative to Singapore Tung Chen-yuan (童振源) said yesterday in a post on Facebook. Wong quoted the song, saying: “As the rain gets heavier, I will take care of you, and you,” in Mandarin, using it as a metaphor for Singaporeans coming together to face challenges. Other Singaporean politicians have also used Taiwanese songs
NORTHERN STRIKE: Taiwanese military personnel have been training ‘in strategic and tactical battle operations’ in Michigan, a former US diplomat said More than 500 Taiwanese troops participated in this year’s Northern Strike military exercise held at Lake Michigan by the US, a Pentagon-run news outlet reported yesterday. The Michigan National Guard-sponsored drill involved 7,500 military personnel from 36 nations and territories around the world, the Stars and Stripes said. This year’s edition of Northern Strike, which concluded on Sunday, simulated a war in the Indo-Pacific region in a departure from its traditional European focus, it said. The change indicated a greater shift in the US armed forces’ attention to a potential conflict in Asia, it added. Citing a briefing by a Michigan National Guard senior
CHIPMAKING INVESTMENT: J.W. Kuo told legislators that Department of Investment Review approval would be needed were Washington to seek a TSMC board seat Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said he received information about a possible US government investment in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and an assessment of the possible effect on the firm requires further discussion. If the US were to invest in TSMC, the plan would need to be reviewed by the Department of Investment Review, Kuo told reporters ahead of a hearing of the legislature’s Economics Committee. Kuo’s remarks came after US Secretary of Commerce Howard Lutnick on Tuesday said that the US government is looking into the federal government taking equity stakes in computer chip manufacturers that
CLAMPING DOWN: At the preliminary stage on Jan. 1 next year, only core personnel of the military, the civil service and public schools would be subject to inspections Regular checks are to be conducted from next year to clamp down on military personnel, civil servants and public-school teachers with Chinese citizenship or Chinese household registration, the Mainland Affairs Council (MAC) said yesterday. Article 9-1 of the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例) stipulates that Taiwanese who obtain Chinese household registration or a Chinese passport would be deprived of their Taiwanese citizenship and lose their right to work in the military, public service or public schools, it said. To identify and prevent the illegal employment of holders of Chinese ID cards or