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EU Summit Affirms Climate Goals, Agrees Economic Recovery Measures

Finland's Alexander Stubb said Europe will "show the way on energy and climate change."
BRUSSELS -- EU leaders breathed a collective sigh of relief after a difficult two-day summit ended in quick agreement on all of the critical challenges currently facing the bloc.

The president of the European Commission, Jose Manuel Barroso, congratulated himself and the outgoing French EU presidency for having successfully negotiated what he described as the most important EU summit in the past five years.

"Before this council, I told you that it was probably [going to be] the most important European Council in which I have participated as president of the European Commission," Barroso said. "Indeed, it was."

Barroso said that "historic agreements" were secured on three crucial issues -- economic recovery, climate change, and the EU's constitutional Lisbon Treaty.

EU leaders signed a broadly worded statement committing themselves to spending the equivalent of 1.5 percent of the bloc's gross domestic product (GDP), or around 200 billion euros ($260 billion), to stimulate demand among consumers.

Member states, however, have been given considerable latitude on how to act on this promise. Not all will necessarily inject new funds into the economy.

Some, like most eastern member states, do not have the money. Others, like Germany, which has a balanced budget and a strong industrial sector, think encouraging consumption does not constitute a sustainable solution.

Diplomats say the atmosphere during a discussion of the bloc's economic fortunes over dinner on December 11 had been somber. A number of EU leaders warned that the bloc has yet to see the worst of the economic downturn.

After the summit, commission President Barroso and French President Nicolas Sarkozy both stressed that short-term hikes in public spending must not jeopardize the EU's long-term objective of balanced budgets.

Dividing The Pain

The summit successfully defused a long-standing row among EU member states on how to divide up the costs of bringing down greenhouse-gas emissions.

East European members whose relatively poor economies are heavily dependent on fossil fuels won a temporary reprieve. Sarkozy argued that concessions were inevitable, given the social costs involved for countries like Poland.

"A country like Poland, with 38 million inhabitants and dependent on coal for 95 percent [of its power], not allowing them to assume their responsibilities in a gradual manner would be tantamount to raising the cost of electricity for the Polish by 200-300 percent," Sarkozy said. "It is not possible, it is not socially acceptable."

The Polish energy sector will only need to buy 30 per cent of its pollution permits in 2013, when -- theoretically -- all of the EU's polluters will have to start paying for the CO2 they produce. The exemption will run out in 2020.

Power-hungry industries in West European countries, which are vulnerable to competition from countries unencumbered by EU-style environmental legislation, were also promised some relief during the same period.

EU leaders said, however, that the concessions will not affect the bloc's ability to deliver of its "20-20-20" promise -- that is, to bring greenhouse-gas emissions down by 20 percent relative to 1990 levels by 2020 and ensure renewable fuels account for 20 percent of the bloc's energy consumption by the same date.

'Yes You Can'

Sarkozy emphatically argued that "no continent" has set itself comparably stringent environmental targets.

Barroso claimed global leadership for the EU in the fight against climate change and appealed to the United States to join it. In making his appeal, he adapted a famous slogan from President-elect Barack Obama.

"We knew that the world was watching Europe closely," Barroso said. "Our message to our global partners is this one: Yes, you can. Yes, you can also do what we are doing. Yes, you can achieve the targets that we have committed ourselves to achieving."

EU leaders also bowed to a series of demands made by Ireland, in exchange for a promise by Dublin to hold another referendum on the bloc's constitutional treaty sometime next year. Ireland was told all countries will in the future keep their seat in the European Commission, and that it can keep its tax system, neutrality, and abortion laws.

The summit also gave its formal seal of approval to an "Eastern Partnership" to be established next year within the framework of the European Neighborhood Policy. A special neighborhood-policy summit will be held early next year in the Czech Republic with the participation of the leaders of Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine.

EU leaders said in a declaration that the Eastern Partnership will help stabilize the partner countries and contribute to "their further movement towards the EU."