EU leaders urge rapid results on financial reform
AFP - Saturday, November 8
BRUSSELS (AFP) - - An international summit next week in Washington should mark only the beginning of a global revamp of the financial order, EU leaders agreed Friday, calling for a second meeting in early spring.
Meeting in Brussels to prepare the Washington summit, European heads of state and government also narrowed their differences on whether Europe needs coordinated plans to drag their economies out of recession.
The 27-nation bloc, under its current French presidency, has led calls for a broad overhaul of the global financial architecture, prescribing a stiff dose of tougher regulation to fix the system's ills.
"The decisions that we will take in the next few months will reshape our world for a decade and more," British Prime Minister Gordon Brown told journalists. "This is not a time for business has usual."
Eager to keep up the momentum for global reform of the financial system, Europe wants a new international summit to take place at least 100 days after the Washington meeting, according to a text that the EU leaders agreed.
Meanwhile, the intervening three months between the two summits should be used for drafting concrete reform proposals, focusing on tightening oversight worldwide of the financial sector.
In particular, EU leaders want no financial product, nor jurisdiction nor institution to be beyond the reach of oversight.
They also backed a call from France, which holds the EU's rotating presidency, for giving a greater role to the International Monetary Fund in assuring global financial stability.
"There is an increasing awareness that the institutions that we built in the 1940s cannot serve us for the purposes of 2008 in the way that we want," said Brown.
However, cracks appeared in Europe's unity over just how far to extend regulators' reach, with both Sweden and the Czech Republic concerned the reform drive could go too far.
"We don't need any kind of over embracing, over regulation," said Czech Prime Minister Mirek Topolanek, adding that "we need better regulation" rather than more.
Taking into account such reservations, French President Nicolas Sarkozy said: "We don't want to go from an absence of regulation to too much regulation but we want to change the rules of the game."
The text agreed by leaders urged regulatory oversight of credit rating agencies, convergence between international accounting standards and limits on bankers' bonuses so that they do not have an incentive to take excessive risk.
While not officially on the agenda, the leaders agreed that the sharp deterioration in Europe's economic prospects required a joint response to limit the damage.
"Everyone is convinced of the necessity to take economic initiatives after the financial initiatives" that were taken to calm the recent credit crisis, said Sarkozy, who hosted the Brussels meeting.
EU nations have been struggling to agree on how much they should coordinate their responses to the economic slump, with Germany pressing ahead with national plans to jolt Europe's biggest economy out of recession.
Sarkozy said he was "very happy" that German Chancellor Angela Merkel agreed on the need for a stimulus plan even though there were important differences of view within the German government itself.
Luxembourg Prime Minister Jean-Claude Juncker, who chairs regular eurozone finance ministers meetings, took a swipe at Sarkozy, hinting that France should practice what it preaches on coordinating economic policy.
"I would like for those who call for stepped-up coordination on economic policy to apply the same rules to themselves," he told journalists.
The EU, meanwhile, will offer crisis-struck Iceland a loan, Iceland's prime minister said late Friday.
Iceland has already agreed with the IMF on a loan of 2.1 billion dollars (1.6 billion euros), still awaiting confirmation.
Poland's finance ministry said earlier Friday that "the International Monetary Fund, Scandinavian countries, Britain the Netherlands and Poland... (will likely) send to Iceland a total of six billion dollars in aid."
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British Prime Minister Gordon Brown is pictured at the end of the European Informal Economic Council summit at the headquarters of the European Council in Brussels. An international summit next week in Washington should mark only the beginning of a global revamp of the financial order, EU leaders agreed Friday, calling for a second meeting in early spring.
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