Czech leader’s “road to hell” speech threatens G20

Mirek Topolanek’s inflamatory charge that Barack Obama’s stimulus measures put the world on “the road to hell” is threatening to  split  the G20, on the eve of its meeting in London this weekend, to tackle the global economic crisis.

Especially as the EU President delivered his attack just days before the G20 tries to settle on a united strategy to tackle the global economic crisis.

There are mitigating factors, of course.  The Czech President is a desperate man.  His rule, in his homeland, is expiring, as a result of a successful no confidence motion in his government. And that will, also bring his six month term, in the rotating  EU presidency to an end.

Mr Topolanek said EU leaders had been disturbed at a summit in Brussels last week to hear calls from Tim Geithner, the US Treasury secretary, for more aggressive policies to fight the global downturn.

Then he said:-“The US Treasury secretary talks about permanent action and we, at our spring council, were quite alarmed at that . . . The US is repeating mistakes from the 1930s, such as wide-ranging stimuluses, protectionist tendencies and appeals, the Buy American campaign, and so on, all these steps, their combination and their permanency, are the road to hell.”

Mr Topolanek was speaking at a European parliament session in Strasbourg.

His speech threw European Union hopes for better relations with the US thrown into chaos. His attack also threw a dark shadow over next week’s G20 meeting.

It  also came barely a week before Mr Obama is due to arrive in Europe on his first official visit as US president. And it put the 27-nation EU clearly on a collision course with Washington.

The crude attack also compounded the confusion that has engulfed EU policy after the Czech leader lost a no-confidence vote in the country’s parliament on Tuesday, forcing him to offer his government’s resignation midway through its six-month EU presidency.

The Australian Prime Minister, Kevin Rudd, who was in Washington yesterday, refused to comment on the Czech leader’s attack, saying he had not heard what Mr Topolanek had said. US officials also refused to  comment on them.

But the Obama administration says it took great pains to ensure that the Buy American provisions in the $US787bn (€579bn) stimulus that the president signed into law last month were consistent with World Trade Organisation rules. It followed, therefore, that any attempt to make them permanent would continue to be consistent with WTO rules.

But other leaders of EU member states, including Angela Merkel, Germany’s chancellor, also disagree with US calls for big fiscal stimuli to battle the recession. However they have couched their opposition in more diplomatic language than Mr Topolanek’s.

Relations between the Obama administration and Mr Topolanek’s government have been delicate in recent weeks because of signals from Washington that Mr Obama may reassess plans to deploy parts of a US anti-missile shield in the Czech Republic, a project to which the Topolanek government has been committed.

Mr Obama has vigorously opposed the view that the Great Depression was caused by too much spending, rather than too little, a view held by a small handful of right wing economists.