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EU Ambassador optimistic global markets will -

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ELEANOR HALL: The surge in the stock markets in response to the co-ordinated European plan and the
European Union Ambassador to Australia and New Zealand, Bruno Julien, has just returned from Europe
and he said he is optimistic that the situation will now stabilise.

He spoke to me in Canberra.

Ambassador the concerted action from European nations on the weekend certainly brought confidence
back to stock markets. Now European Central Banks are offering unlimited cash injections. What's
your response to this latest move?

BRUNO JULIEN: I think what is important is to realise that for the first time maybe, the European
Head of States have reacted together, I mean of course we had the co-ordinate we had the
co-ordinated European monetary policy as you there is a Euro group called the Euro Group and so
there is a Central bank already so we had already considered actions. But is the first time I think
that there is a real political response, collective political response from the EU heads of state
on such a crisis. So it's a very strong signal for Europe.

ELEANOR HALL: And it's a long way from where European leaders were a week ago isn't it?

BRUNO JULIEN: Absolutely I think that now they know what it is and they know what the crisis is and
the importance to react together, I think that it's a good lesson and it shows also that the
European Union is a very important economic, economic entity so it's a real sign of integration of
Europe, a further sign of integration of Europe.

ELEANOR HALL: Offering unlimited cash injections for the banking crisis though is an extraordinary
measure. What are the risks that you see?

BRUNO JULIEN: The risks? I don't see any risk, I think that it's important to show that again we
react together and we counteract the current pessimism of people and show that we are ready to act
together so I don't think that there is a big risk.

There would be a big risk if there was no collective reply.

ELEANOR HALL: Now a major test of the success of the co-ordinated European plan is not just the
recovery of confidence that we've seen in the stock markets, but also a thawing of the Interbank
lending markets.

Now the critical rate there has fallen by 0.7 of a per cent, how much further must it fall to
return lending levels to normal?

BRUNO JULIEN: I agree with you that the guarantee to restore the confidence is an essential
element. Now to know the market is going to react, first of all I am not a specialist and what is
important for me is a political response.

ELEANOR HALL: And the European leaders now have a co-ordinated plan, but they're warning that their
plan will only work if it's bolstered by similarly decisive action in the US. Now they've called
the Paulson plan wishy-washy. What are they saying needs to change in the US approach?

BRUNO JULIEN: Ok I want, the problem now is not to blame anybody today. The problem is to find
solutions we, we showed, we Europeans in a concerted way reply to the current crisis.

What we need to do now is to be sure that all the main actors and not only the United States but
Japan and all the big countries should be part of these discussions. And in the same way that we
have given a reply, collective reply.

We should try to see whether we could have the same kind of collective reply at the world level.

ELEANOR HALL: Ambassador Julien, you've just returned from Europe, how much confidence is there
that this is the beginning of the end of the crisis?

BRUNO JULIEN: Basically the people thought that their banks were quite solid and most of the banks
I've seen are quite solid. So again it's a kind of panic that developed, I don't know why and how
but this has been stopped now.

And I think that the basic intrinsic confidence that many of the Europeans have in their bank will
have to restore quite... a good situation.

If that situation recovers and hopefully it will recover and it will take some time, it doesn't
mean that we should stop the co-ordination and one of our aims in the European Union is to use this
crisis as a stimulating factor to work more closely together.

ELEANOR HALL: Ambassador Julien thanks very much for speaking to us.

BRUNO JULIEN: It's my pleasure.

ELEANOR HALL: And that's the European Union Ambassador to Australia in New Zealand, Bruno Julien.