Published September 22, 2001
LIEGE, Belgium – European Union finance officials Saturday stepped up efforts to sniff out suspicious insider trading preceding the attacks on the United States. They also sought to cushion the economic blow in Europe, especially on its airlines.
German central bank president Ernst Welteke said a study by his bank strongly points to "terrorism insider trading" not only in shares of heavily affected industries such as airlines and insurance companies, but also in gold and oil.
"If you look at movements in markets before and after the attack, it makes your brow furrow. But it is extremely difficult to really verify it," Welteke said. Nevertheless, he said he believes that "in one or the other case it will be possible to pinpoint the source."
Belgian Finance Minister Didier Reynders, who chaired the informal EU meeting, said investigations were also underway in Belgium, France and other countries, looking for suspicious trades before the Sept. 11 attacks sent stock prices plummeting.
The finance ministers ordered agencies in all 15 EU countries to prepare a joint report on the results of their investigations by Oct. 16.
The ministers also called for a report by the same date on efforts to implement a December 2000 U.N. Security Council resolution freezing funds linked to Afghanistan's ruling Taliban and suspected terrorist mastermind Usama bin Laden.
The ministers had intended to focus on preparations for the introduction of euro notes and coins next year, but the meeting was dominated by the fallout from the terrorist attacks.
They agreed on a formula for government guarantees to keep their airlines flying after insurance companies canceled war and terrorism policies following the suicide hijackings in the United States.
German Finance Minister Hans Eichel said the EU governments agreed to serve as insurers of last resort for their national airlines, many of which had warned their fleets would be grounded as of midnight Monday due to lack of sufficient insurance.
The measures would be short-term and limited to war and terrorism liability, he said, adding that they were intended to give airlines and insurance companies time to work out a solution on their own.
Bound by EU rules against state aid, the ministers ruled out using tax dollars to make up losses caused by canceled flights.
"We're not considering compensation because if we give aid to the airline industry, other sectors would line up for help when they're in difficulty," Luxembourg's Budget Minister Luc Frieden said.
However, the ministers asked the EU's executive agency to review whether the $15 billion package approved by Congress for U.S. airlines would put European airlines at a competitive disadvantage.
Separately, Australian Prime Minister John Howard announced a $5 billion insurance lifeline for Australian airlines to protect them from too little coverage and jacked-up premiums, some of which have shot up more than 1,000 percent.