Leaders agree on financial summits

October 19, 2008 12:00 am

, WASHINGTON, October 19 – US President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso agreed to a series of summits with world leaders on the global financial crisis.

The first summit is to be held in the United States "soon after the US elections" on November 4, read a joint statement after the trio met here to discuss the world crisis.

The leaders will "review progress being made to address the current crisis and to seek agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future," the statement read.

Later summits "would be designed to implement agreement on specific steps to be taken to meet those principles," the statement read.

Sarkozy — whose country currently holds the rotating EU presidency — and Barroso arrived Saturday for a three-hour meeting with Bush at the president’s retreat at Camp David, outside the US capital.

The European leaders are seeking to overhaul the Bretton Woods system that has governed international finance since the end of World War II, and launch a new system.

The first of the summits will likely be held in November, White House spokesman Tony Fratto said, without giving a date.

According to the joint statement, the three leaders "had a very positive discussion" about continuing to coordinate steps needed to solve the crisis.

"We are in this crisis together," Bush said when he welcomed the Europeans, detailing steps that have been taken to bolster lending institutions around the world. "These are historic measures suited to our system which I believe will work," Bush said.

Just before the meeting, UN Secretary General Ban Ki-moon said he backed the idea of a summit by early December at the latest.
US and EU leaders have agreed to a series of summits with world leaders on the global financial crisis.

Ban has proposed holding talks at the UN secretariat in New York, saying that would "lend universal legitimacy to this endeavor and demonstrate a collective will to face this serious global challenge."

Bush administration officials seem less impassioned about systemic reform and some kind of global market oversight than Sarkozy and the Europeans.

The president has barely begun the long route of US systemic reform that, in any case, will fall upon his successor in the White House in January 2009.

"As we make the regulatory and institutional changes necessary to avoid a repeat of this crisis," Bush told Sarkozy and Barroso in Maryland, "it is essential that we preserve the foundations of democratic capitalism — the commitment to free markets, free enterprise and free trade.

Sarkozy stressed it was urgent that "we must stabilize the marketplace as swiftly as possible by coming up with answers. Once calm has been restored, we must avoid at all costs that those who have led us to where we are today should be allowed to do so once again.

"We believe in the capacity and the ability of the American people to come up with the answers the world is waiting for," Sarkozy said.

Fallout from the crisis grew as fresh job losses were blamed on the turmoil. Bank chiefs faced a backlash, and stocks Friday closed a tumultuous week with more wild swings.

Key US data showed starts on building new homes slumped an additional 6.3 percent in September to the lowest level since the 1991 recession, the latest evidence of the burst housing bubble that shook the US economy and triggered the global financial crisis.

Unemployment has risen across Europe and the United States, with key sectors such as car-makers badly hit. Analysts forecast worsening economic conditions in most advanced economies.

In Seoul, the South Korean government on Sunday announced a package of foreign currency payment guarantees for banks worth 100 billion dollars in an attempt to stabilize financial markets.

The package included a three-year government guarantee for interbank foreign-currency loans, the Yonhap news agency reported.

Asia’s fourth-largest economy has been hit by devastating currency falls and the departure of foreign investors from the local stock market.

Pakistan’s central bank moved to inject liquidity into the country’s struggling financial system by cutting the amount of cash commercial banks must hold in reserve.

In Germany, Europe’s biggest economy, banks will discuss Monday whether to jointly demand state aid under a brand new 480-billion-euro rescue plan to streamline what could be a chaotic process, Focus magazine said.

Belgian Prime Minister Yves Leterme said his government is also working on a plan to soften the effects of the financial crisis on the nation’s economy.

"We are a hair’s breadth away from a serious economic crisis," he told Le Soir in an interview published Saturday.

Meanwhile the Saudi stock market, the largest in the Arab world, which uniquely opens its trading week on a Saturday, ended the first day down 5.23 percent, shedding some of last week’s gains.


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