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UNCLAS SECTION 01 OF 04 BRUSSELS 001757 
 
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SIPDIS 
 
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TREASURY FOR A/S LOWERY, ERIC MEYER, IMB:BILL 
MURDEN, WILBUR MONROE, CAROL CARNES 
NSC FOR KRISTINA KVIEN, PAUL BROWN 
 
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TAGS: EFIN ECON ETRD EINV EUN
 
SUBJECT: EU LEADERS PRAISE G20 SUMMIT OUTCOMES, 
OUTLINE EU NEXT STEPS 
 
¶1. (SBU) SUMMARY. EU leaders expressed public and 
private approval over the G20 Financial Summit 
discussion and adoption of a detailed action plan. 
French President Sarkozy, British PM Brown, European 
Commission President Barroso and Economic and 
Monetary Affairs Commissioner Almunia, all of whom 
attended the Summit, praised the event as an 
important step forward in coordinating global 
responses to the financial crisis.  President 
Sarkozy announced he will hold a follow-on 
conference in January in parallel with the G20 
process.  Commission sources indicated the Summit 
was helpful in getting major emerging market country 
buy-in to key regulatory and fiscal responses to the 
crisis, but said that individual G20 participant 
participation varied dramatically.  The EU is now 
focused on internal crisis responses, including 
passing existing legislative proposals on capital 
requirements and credit rating agency regulation, 
and presenting new proposals to stimulate demand and 
regulate hedge funds and private equity.  END 
SUMMARY. 
 
EUROPEAN LEADERS REACT FAVORABLY TO SUMMIT 
------------------------------------------ 
 
¶2. (U) European leaders welcomed the G20 Summit 
statement as a significant step in coordinating 
joint global action to counter the financial crisis. 
French President Sarkozy described the U.S. attitude 
to financial regulation as representing a Qhistoric 
shift because of the declarationQs promise that Qall 
financial markets, products and participants are 
regulated or subject to oversight. 
 
¶3. (U) British Prime Minister Gordon Brown welcomed 
the SummitQs rejection of protectionist tendencies 
and said that Qit is the first time that a meeting 
of world leaders has instructed ministers to come to 
an agreement [on global trade], and I think that we 
will see an agreement in the next few weeks. 
 
¶4. (SBU) President SarkozyQs office announced 
November 18 that France will host a January 
conference of world leaders and experts, to 
QcomplementQ the G20 Summit process, entitled QNew 
World: Values, Development and Regulation.Q  The 
stated goal of the meeting is to seek ways out of 
the financial crisis.  The announcement said British 
ex-PM Tony Blair would co-host, and that Qnotable 
economists and political thinkersQ including Joseph 
Stiglitz, Amartya Sen and Francis Fukuyama would 
attend.  SarkozyQs office said the meeting is meant 
to be a more informal forum than the G20 process and 
will take no decisions.  (Comment: the conference 
announcement indicates a QsocialQ European bent to 
the discussion, likely to veer far from our market- 
focused crisis response efforts.  End Comment.) 
 
¶5. (U) European Central Bank President Jean-Claude 
Trichet said that there is a need to Qintroduce a 
framework to dampen the inherent tendency for 
 
BRUSSELS 00001757  002 OF 004 
 
 
financial systems to cause periods of booms, by 
building up imbalances, and then to go through 
busts. 
 
BARROSO EFFUSIVE ON SUMMIT RESULTS 
---------------------------------- 
 
¶6. (U) In remarks to the European Parliament 
November 18, European Commission President Jose 
Manuel Barroso had high praise for the G20 Summit 
results: "In my personal opinion, this first G-20 
meeting definitely marks a new era in the collective 
steering of the global economy" and "last weekend, I 
saw an open-mindedness, even among developing 
countries, that wouldn't have been there a few 
months ago.  It is time now for Europe to make its 
mark." 
 
¶7. (U) Barroso said the Washington Summit paved the 
way for a new global governance model based on the 
free market but also on the principles of the social 
market economy the EU values so much.  Barroso 
emphasized the EU's resolve to address the global 
financial and economic crisis in parallel with other 
global issues such as the Millennium development 
goals, climate change, food security, poverty and 
disease.  "It would be obscene to discuss the 
financial system without thinking of the people that 
do not have access to food or clean drinking water," 
he said. 
 
¶8. (U) The Commission President told MEPs that the 
Commission would present an economic recovery 
program on November 26.  He said such support 
measures would need to be "timely, targeted and 
temporary," and Qaimed above all at limiting the 
crisis on citizens.Q  Barroso said the economic 
tools chosen should Quse all levers available; 
fiscal, structural and regulatory at European and 
national levels in a coordinated manner.Q  He 
believed the current crisis was an "excellent 
opportunity" to show that investment in clean 
technology/energy to fight climate change was not 
detrimental to economic growth. 
 
¶9. (U) Barroso, in presenting the CommissionQs 2009 
work program, said the EU needs a budgetary policy 
to promote demand, make use of synergies of member 
states and avoid negative spill-over from the 
financial crisis.  He asked the Parliament to 
approve rapidly the CommissionQs legislative 
proposals on bank recapitalization, deposit 
guarantees and credit rating agency regulation.  He 
added that Internal Market Commissioner McCreevy 
will put forward legislative proposals on hedge 
funds and private equity as early as December 3. 
(Note: Parliament had asked for these proposals in 
reports issued earlier this year). 
 
¶10. (U) Barroso speculated that the next U.S. 
Administration could bring the U.S. closer to the 
European model of regulated markets with wide social 
 
BRUSSELS 00001757  003 OF 004 
 
 
safety nets by saying that Qit is not Europe that is 
following the American model, it is America that is 
considering a more European model. 
 
COMMISSIONER ALMUNIA PLEASED WITH SUMMIT OUTCOMES 
--------------------------------------------- ---- 
 
¶11. (SBU) Elisabetta Capannelli of Economic and 
Monetary Affairs Commissioner AlmuniaQs cabinet 
(protect) told USEU November 18 that the 
Commissioner, who attended the Summit with Barroso, 
is very happy with the Summit outcomes.  She 
explained that Almunia was pleased by the detail in 
the Summit declaration and action plan, and credited 
the G8 sherpas (particularly from the U.S.) and the 
Treasury Deartment for crafting a strong plan.  She 
noted that the Commissiner expressed dismay at 
press accounts suggesing the Summit accomplished 
little.  She calle press coverage of the Summit 
Qunfair and inaccurate,Q and thought personally that 
the action plan commitments fit well with EuropeQs 
own efforts at financial crisis recovery. 
 
¶12. (SBU) Capannelli said that Commission G8 Sherpa 
Joao Vale de Almeida (BarrosoQs Chief of Cabiet) 
and ECFIN Director General Marco Buti worked with 
other sherpas until the morning of the Sumit to 
finalize the declaration and action plan. 
 
VARIED ROLE OF G20 PARTICIPANTS 
------------------------------ 
 
¶13. (SBU) Capanelli had heard that Australia was 
extremely helpful during the Summit discussion, with 
Brazil playing a good role on Doha and governance 
issues.  She added that China expressed Qvocal 
oppositionQ to heavy emphasis on redressing global 
imbalances, resulting in this being watered down in 
the final text.  India, she said, was silent for 
much of the discussion, Argentina was fairly quiet, 
and Saudi Arabia offered no real input. 
 
¶14. (SBU) She noted that Brazil, India, China and 
South Korea all pushed for the G20 to continue as 
the key forum for financial crisis summitry going 
forward.  She said the Commission continues to have 
concerns over whether the G20 configuration is 
appropriate for this work over the longer term. 
 
EU INSTITUTIONS WORKING ON INTERNAL CRISIS RESPONSES 
--------------------------------------------- ------- 
 
¶15. (SBU) Capannelli said that the EU institutions 
are concentrating now on implementing internal 
measures to address the crisis, and managing high 
market/public expectations for action.  She 
reaffirmed that the Commission will issue a 
Communication November 26 proposing a package of EU 
and member state measures, including additional 
stimulus measures, designed to address the crisis; 
these will need to be approved by the December 
ECOFIN and December 11-12 European Council meetings. 
 
BRUSSELS 00001757  004 OF 004 
 
 
 
¶16. (SBU) USEU will report additional EU feedback on 
the Summit, including after Ambassador meets with 
Commissioner McCreevy November 20. 
 
SILVERBERG