Obama's Rescue Plan is 'road to Hell', Claims Eu President

The scale of transatlantic friction over a concerted plan for global economic recovery was exposed today when the current European Union president branded Barack Obama administration's program as a "road to hell" and said European leaders were "quite alarmed" at the White House's policies.

Mirek Topolanek, the Czech prime minister, revealed that last week's Brussels summit ‑ which exposed differences between Gordon Brown and Germany's Angela Merkel ‑ heard strong criticism of the US recovery program.

The incendiary comments were made in Topolanek's report to MEPs at the European parliament in Strasbourg on last week's EU summit. They came only a week before Obama arrives in Europe for the first time for the G20 summit, hosted by Brown in London, aimed at outlining global action to tackle recession.

Topolanek's criticism flatly contradicted Brown's comments, delivered in his first speech to the European parliament on Tuesday, in which the prime minister talked of a "new era" of transatlantic cooperation on the financial crisis.

Topolanek, who is a lame duck prime minister after a vote of no confidence in his government in Prague on Tuesday evening, was speaking not as the Czech government chief, but as the chair of last week's EU summit of 27 governments. He warned that the Obama administration's opting for massive stimulus programs, amounting to almost $1tn, risked destabilizing global financial markets.

"The US treasury secretary talks about permanent action and we at our [EU summit] were quite alarmed by that. He talks about an extensive US stimulus campaign. All of these steps are the road to hell."

Yesterday, Brown told the same chamber he had just spoken to Obama in preparation for next week's London summit. "Never in recent years have we had an American leadership so keen at all levels to cooperate with Europe on financial stability, climate change, security and development," said Brown.

Topolanek's frank remarks exposed the transatlantic gulf over how best to tackle the crisis ahead of the G20 summit just as Brown tours the Americas to try to secure the outlines of a global pact.

The collapse of the Czech leader's government compounds the mood of gloom and heightens the climate of political and economic instability pervading Europe as it seeks to tackle the crisis.

The fall of the Czech government is the fifth such collapse in Europe in recent weeks and the third in eastern Europe, all either directly or indirectly caused by the financial and economic turmoil.

Further evidence of emergency action and looming trouble came today when Romania secured a €20bn rescue package from the EU and the International Monetary Fund, becoming the third of the EU's new members in central Europe to call in the IMF.

Topolanek's relegation to lame duck comes in the midst of what should have been the twin highlights of his career ‑ being the first leader of a former Soviet bloc country to chair the EU and 10 days before he welcomes Obama to a summit in Prague.

Topolanek is likely to remain in office as a caretaker until his EU presidency ends in June, but the role of steering the EU through a series of crisis summits is likely to be impaired.

The power vacuum in Prague strengthens the hand of the Czech president, Vaclav Klaus, the most Eurosceptic leader in Europe. He is an ardent opponent of the Lisbon treaty streamlining the way the EU is run and is the continent's leading climate change denier. Both issues, Lisbon and global warming, are at the top of the EU's agenda.

The Czech Republic is the only EU country, apart from Ireland, that has yet to ratify the Lisbon treaty. Alexandr Vondra, the deputy prime minister, conceded that "it will be a lot more difficult now to convince people to vote in favor".

The prospect of further upsets to the ill-starred attempt to rewrite the way the EU operates has European leaders panicking or despairing.

"[Lisbon] should not be used as a weapon on domestic issues," said Jose Manuel Barroso, the European commission president. "Rejection would only serve to damage other countries. All 27 member states have signed up to the treaty and this agreement has to be respected."