EU must lead world to save financial system, climate, leaders say

Business Materials 15 October 2008 14:55 (UTC +04:00)

The European Union must prove that it can lead the world in solving the financial crisis and fighting global warming, EU leaders said Wednesday ahead of a summit in Brussels, reported dpa.

"Europe is leading the global response: We must continue to do so. An urgent priority is to further deepen cooperation on the international level, specifically with the United States," the head of the EU's executive, Jose Manuel Barroso, told journalists after a meeting with British Prime Minister Gordon Brown.

"Stage one has been the stabilization of the financial system ... I believe we also have to move to stage two, (and) to make sure that the problems that developed in the financial system, which we know started from America, do not recur," Brown agreed.

At the same time, the EU must keep its courage in the face of the global financial crisis and refrain from watering down European Commission proposals on cutting emissions of carbon dioxide (CO2), the gas most linked with global warming, the leaders said.

"Let's not make the same mistakes we did with climate change as we did with the financial crisis ... The question I will put to EU leaders this evening is this: are you going to follow short-termism, or are you going to show the ethics of responsibility?" Barroso said.

Ahead of the summit, EU leaders have been engaged in frantic diplomacy aimed at agreeing common rules for rescuing the financial sector amidst the worst stock-market falls in 80 years.

Observers had tipped the long-planned summit in Brussels to become a fire-fighting exercise aimed at calming spooked financial systems.

But on Sunday, the heads of state and government of the 15 countries which use the euro agreed on a "tool box" of measures for financial rescues at an unprecedented meeting in which Brown briefed them on a similar British rescue plan launched on October 8.

While the package has not yet been approved by the 12 EU members which do not use the euro, officials say that that approval is taken for granted, allowing the bloc to move on to other issues.

The reform of international financial systems now looks set to top the agenda, with Brown among the EU's leaders calling for new rules on how to manage global markets.

The financial system should have new rules on disclosure and transparency, better and broader supervision, international cooperation and an early-warning system for future crises, he said.

The commission's proposals for fighting climate change are also in the spotlight, with nine member states from Central and Eastern Europe threatening to block the measures unless they are promised unspecified "recognition" for emissions cuts they made in the 1990s.

A number of member states, led by Italy, are also calling for a re-assessment of the economic impact of the proposals, arguing that the financial crisis makes earlier, ambitious plans too expensive.

The EU's leaders are also set to discuss the summer's war in Georgia, the crisis besetting peace talks in Geneva and the failure of the EU's Lisbon Treaty.