Brown calls for "new Bretton Woods"
British Prime Minister Gordon Brown on Wednesday joined French President Nicolas Sarkozy in calling for "a new Bretton Woods" to better regulate global financial markets and avoid future credit crunches, reported dpa.
"We urgently need what you might call the 'new Bretton Woods', so that we can restore confidence in the system while dealing with the areas that have been exposed in recent weeks," Brown said before the start of a European Union summit in Brussels.
Brown's proposals included placing the world's top 30 companies - among them "some of the biggest financial institutions" - under international supervision, and the creation of "an early warning system" designed to prevent future financial crises from spreading.
The premier also called for a global summit to discuss the new Bretton Woods, as well as improved transparency and coordination.
"Instead of having national supervisors, we need a global way of supervising our financial system," Brown said.
Sarkozy was the first European leader to call for a new Bretton Wood, named after a 1944 conference that established rules for commercial and financial relations among the world's major industrial states.
"We want to build the beginning of a new financial world as they did in Bretton Woods," Sarkozy said at an October 4 meeting in Paris attended by Brown, German Chancellor Angela Merkel and Italian Prime Minister Silvio Berlusconi.
Since then, the British premier has lead European efforts to tackle the global financial crisis.
And at their two-day summit in Brussels, EU leaders were set to rubber-stamp a 2-trillion-euro (2.7-trillion- dollars) financial rescue plan inspired by Britain.
Approved on Sunday by eurozone leaders in Paris, the plan includes measures to guarantee interbank lending and to partly nationalize shaky financial insitutions by providing them with liquidity in exchange for shares.
"The European Council reaffirms its determination to act in a comprehensive and coordinated manner to restore the good functioning of the financial system," leaders were set to announce, according to a draft statement seen by Deutsche Presse-Agentur dpa.
But while there is a shared awareness that common action is essential, some member states have expressed concerns that such measures could create unfair advantages to some institutions.
"I will clearly want the European Commission's assurances that the planned steps are not a case of disallowed public aid," said Czech Prime Minister Mirek Topolanek ahead of his departure for Brussels.
Speaking on Tuesday, European Commission President Jose Manuel Barroso appealed to governments to put their divisions aside and sign up to the eurozone's plan.
"Even after this crisis, there are some governments that are opposing a more coordinated European approach," Barroso said.
"To try and go it alone in this climate would be a fatal mistake for any government anywhere in Europe," he said.
In Paris, eurozone leaders also agreed to set up a financial crisis management unit tasked with sharing out sensitive financial information among the eurozone's key players and to come up with a rapid, common response.
The unit would comprise governments, the EU presidency, the heads of the European Central Bank and of the European Commission, and the chairman of the eurogroup, Luxembourg's Jean-Claude Juncker.
While in Brussels, EU leaders were set to underline the need to "strengthen the supervision of the European financial sector", especially with regards to banks and insurance companies operating in several member states.
And with the rescue plan likely to dig deeply into member states' public accounts, EU leaders were set to agree on the need to relax the bloc's strict budgetary rules.
"The application of the revised Stability Pact should reflect the exceptional circumstances that we are facing, as its rules allow," the meeting's draft conclusions state.
Officials in Brussels say this means that budget deficits would be allowed to exceed by "several decimal points" the standard 3-per cent-of-gross domestic product (GDP) limit.
Finally, EU leaders were set to call for a curb on managers' salaries and on the need to work with their international partners on "a real and comprehensive reform of the international financial system."
Such a system should be based on the principles of "transparency, banking soundness, responsibility, integrity and global governance."
European calls for a new Bretton Woods would likely be discussed by Sarkozy, Barroso and George W Bush at a meeting scheduled to take place on Saturday in the US president's mountain retreat of Camp David