European Commission President Jose Manuel Barroso speaks to reporters media before the G20 Summit in Los Cabos, Mexico, on June 18, 2012.HENRY ROMERO/Reuters
Tensions between Europe and the rest of the G20 broke wide open in Los Cabos as the president of the European Commission laid bare his frustration with the constant lecturing from outsiders, including Canada.
In the runup to the two-day summit in this luxury seaside resort town, Europeans received urgent warnings from many fronts that the time for short-term delay tactics is over. That frustration stems largely from the fact that the last G20 leaders' summit in Cannes was dominated by Europe's troubles and promises of reform. Yet seven months later little has changed, and European problems now threaten recoveries elsewhere, including the United States during an election year.
Yet in the face of this pressure for quick action, the top leaders of the European Union are defending their current course. At the G20, they are asking for patience as they begin to unveil longer-term changes to banking rules and debt policies that will ultimately create the more united European economy that is widely viewed as the ultimate response required to settle the ongoing string of financial crises.
Negotiators for the G20 worked overnight on language for a final communiqué that aims to nudge Europe to do more, while praising the plans Europe has announced to date.
The president of the European Commission, José Manuel Barroso, reacted tersely when asked to respond to recent comments from Prime Minister Stephen Harper that Europe does not need outside help to stabilize its economy.
"Frankly, we are not coming here to receive lessons in terms of democracy and in terms of how to run an economy because the European Union has a model that we may be very proud of," Mr. Barroso said.
He and European Council President Herman Van Rompuy answered questions Monday at the G20 summit following a news conference in which they outlined long-term plans to move toward deeper financial integration of the euro zone.
The European Commission president said his members are moving toward a banking union, including guaranteeing each other's bank deposits. But some of these details may not be outlined until the fall and it is not clear when they will ultimately be put in place.
Still, Mr. Barroso did outline a move toward some of the specific reforms Europe has called for.
The euro zone will move toward more integrated banking oversight and a common deposit guarantee system. The European Union will also consider, "under strict conditions," ways to package the zone's combined debt.
"But let me be very clear, any future euro bonds or stability bonds will not be a license to spend. On the contrary, they will become a powerful tool for increased discipline and stability," he said.
The comments from the leadership of the EU increases the heat on German Chancelor Angela Merkel, who leads Europe's largest economy and is highly skeptical of moving quickly toward deeper integration. German leaders have expressed concern that such changes would let struggling member states off the hook from making the tough economic decisions necessary to put their nations on a sustainable track.
U.S. President Barack Obama was expected to urge Ms. Merkel to soften her stand during the two-day summit, and the President later spoke positively of their discussion Monday. After Monday evening's G20 leaders dinner, Mr. Obama was scheduled to have a late-night meeting exclusively with European leaders.
Both the U.S. and Canada are refusing to contribute more money to the International Monetary Fund, but Mr. Harper's Conservatives have used particularly derisive language in arguing Europeans should not get a cent of Canadian tax dollars.
On Monday afternoon, Mr. Harper said his meetings with other G20 leaders at the summit make him believe that the "great majority" of the leaders support Canada's position. However, Canada and the U.S. are the only G20 members stating they will not contribute additional funds this week to the IMF as part of a plan to raise more than $430-billion in new commitments.
"I'm not going to comment on internal European politics per se. Let me just say this. First of all, obviously growth is everybody's focus," he said. "It should be everybody's focus. That's what we really need."
Bill Curry