Time to Act
October 15, 2008
"I am pleased to see that there is now a consensus on the necessity and on the substance of a coherent effort," Barroso said of the plan worth an estimated 2 trillion euros ($2.7 trillion). "I expect confirmation and strengthening of this consistent and coherent effort by the European Council."
EU leaders are due to meet in Brussels on Wednesday and Thursday for a regular autumn summit whose content will largely be devoted to the credit crunch.
Discussions will focus on the outcome of a meeting in Paris on Sunday in which the 15 countries that share the euro approved a British-style financial rescue package which includes measures to guarantee interbank loans.
Bank reluctance threatens recession
The reluctance of banks to lend out their money is at the heart of the current financial crisis, which is in turn threatening to plunge European economies into recession.
Euro zone governments also agreed in Paris to guarantee at least 50,000 euros of their citizens' bank deposits and to bail out financial institutions by providing them with cash in exchange for a share in such companies.
The combined potential cost of such measures for the EU as a whole has been estimated at around 2 trillion euros, with Germany, Britain and France putting up a large share of that total.
However, officials in Brussels note that the combined figure includes a significant amount of bank guarantees that may never be needed.
"If you look at the magnitude of this response, and the effects of coordination, they were credible. And that is what markets and citizens are looking for," Barroso said.
The head of the EU executive also backed calls by French President Nicolas Sarkozy for an international conference to reform the global finance system.
"An urgent priority now must be to further deepen coordination at the international level, and specifically with the US," Barroso said.
Britain's Brown gets praise for efforts
And he heaped praise on British Prime Minister Gordon Brown, whose national rescue plan largely inspired the EU's own plan.
"Let me say on this occasion how appreciative we are of the efforts of Prime Minister Gordon Brown," Barroso said. "His contribution was very important."
Brown was invited to hold talks in Paris ahead of the euro-summit, despite Britain not being part of the 15-member eurogroup, whose finance ministers meet on a regular basis.
The commission chief also called on national governments to approve a series of proposals introducing common and tougher rules for banks, insurance companies and credit rating agencies.
"Even after this crisis, there are some governments that are opposing a more coordinated European approach," Barroso said.
"(But) I have boundless faith in the sense of responsibility and the common sense of our heads of state and government.
"To try and go it alone in this climate would be a fatal mistake for any government anywhere in Europe," Barroso said.