Analysis: Europe nervy about Obama’s plans

LONDON, England (CNN) – There was little doubt that Barack Obama was „Europe’s candidate“ in the US presidential election. High hopes are invested in him still across Europe’s capitals. But as EU leaders contemplate the next president’s daunting in-tray their hopes are more than ever tinged with a little nervousness.

Will everyone get a fair piece of the economic pie under Barack Obama’s administration?

Some of them had hoped for face time with Obama, perhaps even a dinner, at the recent Washington economic summit. They were disappointed not to see him and even more that there was no counter from the president-elect to President Bush’s pre-summit lecture on the need for governments to interfere in economic matters as little as possible.

That is not the current European view at all, and they had hoped it was not Obama’s view either. They have also been disappointed by strong hints from the Obama team that he is none too keen either on multi-lateral regulatory reforms.

The biggest fear for Europeans now scrabbling for clues on his economic intentions is that he will give way to growing pressures in Democratic circles for a more protectionist America.

European governments had duly noted that in his acceptance speech to the Democratic convention, a speech designed to reach out to those in blue collar America who had originally seen a stronger appeal in Hillary Clinton, Senator Obama declared: „Unlike John McCain I will stop giving tax breaks to corporations that ship jobs overseas and I will start giving them to companies that create good jobs right here in America“.

The Europeans would like a little more clarity on trade questions. During the primaries Obama frequently sounded cool on the idea of free trade, perhaps because President George W.Bush has been a keen advocate.

The Europeans don’t really know whether Obama’s coolness came from the soul or whether it was a tactic dictated by his need to reassure working class voters, especially given he has since declared that free trade is „a cause I believe in“.

What has tended to increase the doubts in their minds is President-elect Obama’s backing for the bail-out scheme for America’s biggest motor manufacturers like GM and Chrysler. Europeans looking to Mr Obama for a more multilateralist approach to the world’s problems have not been heartened by that.

Don’t Miss

Obama will ‘do what’s necessary’ to fix economy, aide says

Britain’s Prime Minister Gordon Brown, potentially a strong Obama ally specifically linked the proposed bail-out to wider trade questions when in a speech in advance of the Washington economic summit he declared that it was important that the world leaders sent out the signal that „protectionism would be the road to ruin.“

Brown, seen as the author of major international efforts to stabilize banks and introduce international regulatory frameworks, raised the specter of the 1930s when he went on to add: „If we get into a situation where countries made decisions irrespective of what happened anywhere else then we will see the same problems of other times. The dividing line here is between an open society capable of trading around the world against a protectionist response that happened in the 1930s and is totally unacceptable.“

Congress agreed an aid package for the US car industry , which employs three million people, of up to $25 billion back in September but EU authorities have said that if they judge the aid for the US motor manufacturers to be illegal under international trading rules then they are ready to take action at the World Trade Organization.

In the meantime efforts to give a boost to trading and avoid the decline into a worldwide depression by kick-starting the failed Doha Round of world trade talks seem likely to await the end of the Bush presidency and the arrival in office on January 20 of Obama. Another big one for that crowded in-tray.