Meeting of the Minds
October 18, 2008
French President Nicolas Sarkozy and EU Commission President Jose Manuel Barroso on Saturday meet US President Bush for talks on the raging financial crisis, a day after the release of more gloomy data about the US economy, continuing market volatility and fresh job losses.
In further signs of a looming recession, new reports on Friday showed that US consumer confidence and new-home construction plummeted to new lows.
In France, the finance industry's reputation took a new blow as the Caisse d'Epargne bank said it lost about 600 million euros ($800 million) in a trading "incident." A company official, speaking on condition of anonymity, told AFP that a group finance director had been sacked over the loss.
In Europe, Swedish plane maker Saab said it would cut 500 jobs over two years after announcing heavy losses. Unemployment has grown across Europe with key sectors such as car-makers badly hit as the downturn gathers pace.
The news came on a day of wild see-saw moves on Wall Street, lending added urgency to efforts on both sides of the Atlantic to pass emergency rescue measures to shore up confidence in financial institutions.
"Europeans taking bold steps"
Bush has been working with global leaders to create a common response to crumbling markets and teetering banks that have fueled worries of a worldwide recession.
In a speech at the US Chamber of Commerce, Bush said he would continue "close consultations" with Europe at the meeting with Sarkozy and Barroso.
"Our European partners are taking bold steps. They show the world that we're determined to overcome this challenge together. And they have the full support of the United States," Bush said, adding that government interventions to stop the crisis needed time to work.
Bush's comments came a day after Germany's parliament, in a historic fast-track vote, passed a 500-million-euro bank rescue package to restore shattered confidence in the crisis-ridden financial sector.
But Bush did not specifically mention calls by European leaders this week to reform the financial system that the world has been operating under since 1944.
White House spokeswoman Dana Perino said the US focus was on the immediate crisis.
"I think the most important thing we can do is make sure that we stop the bleeding here before we move on to the next project," she told reporters.
No significant policy announcements expected
Earlier, Perino also sought to play down the significance of the Sarkozy-Bush meeting, saying it was unlikely to result in any specific measures.
"I don't believe that tomorrow night's meeting will have any new policy announcements or any decision on a date or a location for that meeting although everybody is working towards that," Perino told reporters.
"I think a date for a meeting is a little bit less important than figuring out what recommendations people want to come to the table with," she said.
Sarkozy and Barroso head to Camp David, the presidential retreat in the state of Maryland, after meeting Canadian Prime Minister Stephen Harper in Quebec City to launch a process that might eventually lead to an "economic partnership" between Canada and the EU.
The meeting was initially supposed to focus on a possible free trade deal between Canada and the EU. But the meeting's new focus was announced by Harper as he laid out a six-point economic plan following his re-election this week.
He promised to make sure Canadian banks are not put at a disadvantage by rescue efforts in Europe and the United States, where governments are pumping money into financial institutions to protect them.