Strasbourg, France (PressExposure) March 26, 2009 -- Just one day after his government collapsed because of a parliamentary vote of no-confidence, Czech Prime Minister Mirek Topolanek, told the European Parliament that President Barack Obama's massive stimulus package and banking bailout "will undermine the stability of the global financial market".
Topolanek whose country currently holds the EU presidency said, "the United States did not take the right path", and he criticized America's widening budget deficit and protectionist trade measures, saying, "all of these steps, these combinations and permanency is the way to hell. We need to read the history books and the lessons of history and the biggest success of the (EU) is the refusal to go this way. Americans will need liquidity to finance all their measures and they will balance this with the sale of their bonds but this will undermine the stability of the global financial market".
The Obama administration hopes to spend its way out of the present deepening recession by means of a $787 billion economic stimulus plan, of tax rebates, health and welfare benefits, along with energy and infrastructure spending.
In an attempt to get banks to lend again, the treasury will pump $1 trillion into the U.S. financial system and will buy up treasury bonds and mortgage securities in an effort to rid banks of the "toxic assets" (devalued and untradeable assets) that presently appear on their balance sheets.
Obama insisted on Tuesday, March 25th, that his massive budget proposal will move the nation down the right path and will get the ailing economy growing, "This budget is inseparable from this recovery, because it is what lays the foundation for a secure and lasting prosperity".
Most European leaders favor tighter financial regulation, whereas the U.S. is pushing for huge and fast growing economic stimulus plans, and Topolanek's comments suggest that the E.U. is on a collision course with Washington over how to deal with the global economic recession.