European Union President Calls U.S. Plans to Spend Its Way Out of Recession “A Road to Hell”
March 25th, 2009Via: AP:
The president of the European Union on Wednesday slammed U.S. plans to spend its way out of recession as “a road to hell.”
Czech Prime Minister Mirek Topolanek, whose country currently holds the rotating EU presidency, told the European Parliament that President Barack Obama’s massive stimulus package and banking bailout “will undermine the liquidity of the global financial market.”
A day after his government collapsed because of a parliamentary vote of no-confidence, Topolanek took the EU presidency on a collision course with Washington over how to deal with the global economic recession.
The blunt comments pushed other European politicians into damage control mode, with some reproaching the Czech leader for his language and others reaffirming their good diplomatic ties with the U.S.
Most European leaders say the focus should be on tighter financial regulation, while the U.S. is pushing for larger economic stimulus plans — but nobody has so far escalated the rhetoric to such strident levels.
Topolanek’s words are the strongest criticism so far from a European leader as the 27-nation bloc bristles from recent U.S. criticism that it is not spending enough to stimulate demand.
They also pave the way for a stormy summit next week in London between leaders of the Group of 20 industrialized countries.
The host of the summit, British Prime Minister Gordon Brown, praised Obama on Tuesday for his willingness to work with Europe on reforming the global economy in the run-up to the G-20 summit.
The United States plans to spend heavily to try and lift its economy out of recession with a $787 billion economic stimulus plan of tax rebates, health and welfare benefits, as well as extra energy and infrastructure spending.
To encourage banks to lend again, the government will also pump $1 trillion into the financial system by buying up treasury bonds and mortgage securities in an effort to clear some of the “toxic assets” — devalued and untradeable assets — from banks’ balance sheets.
