Protectionism no answer to globalisation: Europe | india | Hindustan Times
Today in New Delhi, India
Nov 19, 2017-Sunday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Protectionism no answer to globalisation: Europe

Debate about protectionism in Europe has resurfaced because of government hostility to takeover bids.

india Updated: Apr 08, 2006 15:46 IST

Europe must resist protectionism and find other ways of meeting the challenges of globalisation, finance chiefs from several European Union countries said on Saturday.

The comments came at a meeting in Vienna where EU ministers were due to meet their opposite numbers from 13 Asian countries including China, whose emergence as a cheap and powerful trading competitor is rocking industrialised nations.

British Finance Minister Gordon Brown said protectionism and the failure to liberalise markets for supplies of things such as gas and electricity was costing Europe billions of euros and should be shunned.

"It's surely not the way," said Luxembourg Prime Minister Jean-Claude Juncker, who chaired some of the talks during a three-day gathering in Vienna.

"Europe's response to globalisation can never be protectionsm," Swedish Finance Minister Par Nuder said.

Debate about protectionism in Europe has resurfaced because of government hostility to takeover bids for some key companies and concern over the French government's decision to pursue what it calls a policy of "economic patriotism".

But the tension goes well beyond that, with US politicians increasingly raising national security concerns in a Congress election year as a reason for holding up foreign takeovers by companies from Dubai.

"If we saw more protectionism in the U.S. in an election year, that would be harmful to the whole world economy," said Sweden's Nuder.

Adapting to China

European ministers, due to be joined by the Asians later in the day, were also pushing for China and Asia more generally to let their currency exchange rates appreciate to levels that would make competition in export markets fairer.

The Vienna talks began with the 12 euro zone countries on Friday and then expanded to all 25 European Union ministers and central bankers, ahead of sessions on Saturday and Sunday with counterparts from Asia.

Global growth is expected to remain healthy at more than 4 per cent this year, with China growing three or more times as fast as Europe, the United States and most of the long-industrialised nations.

Adapting is proving particularly hard in some of Europe's big economies such as France, where Prime Minister Dominique de Villepin has sparked strikes and demonstrations by proposing a new labour law to make hiring and firing easier.

Big business ramped up the pressure on governments to do more liberalising and less interfering.

The European business federation, UNICE, accused governments on Friday of dragging their heels and failing to adapt to cheap competition from around the world.

Austrian Finance Minister Karl-Heinz Grasser, hosting the proceedings, said politicians and business needed to do more to convince citizens that they had more to gain than lose from increasingly global competition.

Unemployment is running at close to 19 million in the euro zone, for a jobless rate of 8.2 percent on average that masks even higher rates in countries such as Germany and France.

Chief executives from three big European firms -- Germany's Volkswagen, Switzerland's Nestle and Spain's Telefonica -- were invited to Vienna to talk to ministers on Saturday about what Grasser described as "corporate responsibility".

VW CEO Bernd Pischetsrieder says Europe's biggest carmaker has no alternative but to consider axing up to 20,000 jobs in order to boost profits in the next three years.