EU leaders call for international financial reform

By Tejinder Singh

Brussels, Nov 8 (IANS) European Union leaders have agreed that next week's emergency summit in Washington must lead to a reformed international financial system, declaring: "We cannot fail'.

Meeting ahead of the Nov 15 summit, leaders of the 27-nation EU agreed to "defend the common vision for restructuring the financial system", French President Nicolas Sarkozy, current holder of the rotating EU Presidency, told journalists.

Leaders of 20 of the world's richest nations and biggest emerging economies, including India, are set to attend the summit in Washington DC to discuss how to prevent a financial crisis happening again.

Addressing a joint press conference with European Commission President Jose Manuel Barroso Friday, Sarkozy said: 'We should be able to come up with answers to the crisis. The international summit must pave the way for reform of the international financial system."

Barroso added: 'We cannot fail. It has to be a historic meeting."

"Apart from financial issues, global challenges also should be integrated,' he said, listing them as food shortages, the fight against poverty, climate change, and the relaunch of Doha Round of world trade negotiations.

'We have to look beyond the financial crisis, to the economic crisis. We need specific measures to cope with the slowdown and maintain growth and employment,' Barroso said.

The EU leaders agreed to four guiding principles:

- No financial institution, market segment and/or jurisdiction must escape proportionate and adequate regulation or at least supervision;

- The new international financial system must be based on principles of accountability and transparency;

- The new international financial system must allow risks to be assessed so as to prevent crises;

- The International Monetary Fund (IMF) must be given a central role in a more efficient financial architecture.

Sarkozy said he had discussed the summit with US President-elect Barack Obama Thursday, when he apprised him of European leaders' view that since the transition in the US government will take time there needs to be a strong follow-up.

EU leaders say a period of 100 days starting Nov 15 'should be used for drawing up measures to implement the principles' before holding a follow-up summit.