European Leaders Discuss Common Ground in Economic Crisis

By Lisa Bryant

Paris
22 February 2009

European leaders agreed to a common platform to combat the global financial crisis that includes oversight of all financial markets and products around the world. The proposed measures were drafted in Berlin in preparation for a key meeting of the world's economic powers in April.

The measures for financial markets proposed by EU leaders are a sweeping and tough reaction to what many perceive to be excesses and lack of regulation that helped trigger the global economic crisis. At a meeting in Berlin, leaders from eight European countries called for regulating financial markets and hedge funds, investment funds that typically lead to aggressive financial strategies.

German Chancellor Angela Merkel, who hosted the summit, said all financial markets, products and participants that pose a major risk must be regulated.

Ms. Merkel also called for world economies to coordinate in establishing sanctions for tax shelters and regions where financial deals are opaque.

The European meeting comes ahead of a London summit on the international crisis in early April of the so-called G-20 nations, the world's top economic powers. But it is unclear whether the Europeans' call for widespread regulation will be well received by other G-20 members, which include the United States, China, Japan and several developing nations.

British Prime Minister Gordon Brown said the European leaders had also agreed on the need to shore up international institutions like the World Bank, including in their role in helping the poorest nations.

"We decided that the international institutions should have at least $500 billion to enable them not just to deal with crises, but to enable them to be able to prevent crises," said Gordon Brown. "We have also decided we want to see a greater role for the World Bank in helping the poorest countries of the world."

Mr. Brown also said the European nations support championing an environmentally sound economy as part of global stimulus deals, notably reducing heat-trapping carbon dioxide emmissions. Sunday's proposals will be examined by the entire 27-member European Union in March.