The European Union’s battle against righting countries crippled by the recession is being undermined by political infighting and insider clubs more concerned about national interests and excluding smaller members, a group of diplomats and ministers have said, complaining about what they called a “cliquey” atmosphere that led to a failure on how the use community funds. “I must admit I’m extremely worried about the EU’s institutional chaos. Never in the EU’s history has there been a period like this with so many cliques,” Finnish Foreign Minister Alexander Stubb, a former Member of the European Parliament, said after talks in Brussels with his EU counterparts ahead of an emergency summit of EU leaders, called by the bloc’s Czech presidency to address growing concerns about the spread of protectionist responses to the economic crisis.

The announcement of the March 1 summit had come shortly after French President Nicolas Sarkozy infuriated Prague by suggesting that its car makers should move their production back from Central Europe. Addressing media reports of a damaging rift between one of the EU’s most powerful members and the current EU presidency, French Foreign Minister Bernard Kouchner and Czech Foreign Minister Karel Schwarzenberg announced they would now be holding regular talks with each other. “We were sometimes very surprised to discover in the press that we were in a bad mood, Karel and I. This is not true at all,” said Kouchner.

“So we decided to see each other, or at least to talk to each other twice a week ... on all the subjects,” the two ministers said. But any calls for harmony were short-lived, however, with Stubb soon leading a chorus of complaints against a separate meeting in Berlin of the bloc’s six richest members - Britain, France, Germany, Italy, the Netherlands and Spain. A recent in Berlin was designed to forge a common EU response to the global financial crisis ahead of a G20 summit in London on April 2, but it was criticised by smaller EU member states, with Sweden’s Carl Bildt saying “six to eight” EU countries had complained about being left out of the decision-making loop. The rebel group included Sweden, Poland, Belgium, Luxembourg and Poland. They were joined by Spain and the Netherlands, EU heavyweights who are nonetheless not part of the regular G20.

“I can’t understand what was gained by (the) meeting in Berlin. This confusion is not only undermining small EU member states and the (European) commission, but the council (of all 27 EU members) itself,” the Swedish foreign minister said. Poland has itself called for Central and Eastern European members to meet ahead of that EU summit over concerns that Eurozone countries were dictating the agenda on how to counter the global economic and financial crisis. “What I have a specific problem with is that the G20 has suddenly become the G22 and I don’t understand the mathematics behind that,” he said. Asked whether the protest could lead to further action, Bildt answered, “it remains to be seen.” Poland called for Central and Eastern European members to meet ahead that summit amid concerns that eurozone countries were dictating the agenda on how to counter the economic and financial crisis, but Polish diplomats stressed this was not the creation of a clique within the EU.

BARROSO’S PLAN REELING

And in a setback for European Commission President Jose Manuel Barroso, foreign ministers also failed to make headway on his proposal to devote five billion Euro of community funds to high-tech projects to help kick-start the EU economy. Ministers agreed that the money should not come out of the EU’s budget for 2008, as had been originally proposed by the EU’s executive, but failed to agree on alternative sources of funding, diplomatic sources said. Barroso in November, 2008 proposed the five billion Euro cash injection for projects linking the energy grids of isolated member states and boosting high-speed Internet access in rural areas. Part of the money would also be used to boost alternative sources of energy.

But EU members have since fallen out both over the list of energy projects which the Commission has identified, and its plan to look for the money among the EU’s unspent funds, which would normally be returned to national governments. The Commission’s subsequently revised list of projects was criticised by several member states. Spain, Portugal, Austria, Bulgaria and Greece were among those lamenting that too much money was being devoted to projects affecting Northern and Eastern European nations. Germany, which pays the largest sums into the EU budget, has also been particularly critical of the package, but German Foreign Minister Frank-Walter Steinmeier denied blocking any progress, insisting however that “discussions”were still needed.

The Czech presidency acknowledged that problems remained, but expressed optimism that a deal could be reached in time for the EU’s regular spring summit of March 19-20. The divisions witnessed in Brussels highlighted the EU’s difficulties in remaining united as it struggles to deal with its worst economic downturn in decades. Ministers agreed that the money should not come out of the EU’s budget for 2008, as had been originally proposed by the EU’s executive, but failed to agree on alternative sources of funding, diplomatic sources said. Member states were torn between raising the money in a one-off extra payment this year, and finding it by re-organising the planned EU budgets for the period 2009-11.