French President Nicolas Sarkozy said here Sunday that leaders of the European Union (EU) had agreed on a framework for dealing with "toxic assets" which had cost European banks multi billions of dollars through risky investments.
Speaking at a press conference after the EU special summit, Sarkozy said that the agreement would give every EU nation "great flexibility" to determine the eligible assets while giving a European framework to ensure the good functioning of the EU internal market, Xinhua reported.
Earlier this month, EU finance ministers agreed to coordinate on how to deal with toxic assets, which soured due to potential losses from securitized debt based on bad loans such as U.S. subprime mortgages.
At Sunday's informal summit, EU leaders agreed to act together in response to the unfolding financial crisis.
"We agreed that Europe can only face this challenge and overcome the current crisis by continuing to act together in a coordinated manner," Czech Prime Minister Mirek Topolanek, whose country holds the EU rotating presidency, told reporters after the half-day summit.
Topolanek said EU governments will act within the rules of the single market and the economic and monetary union when they spend massive money on financial bailouts and economic stimulus packages.
But the summit failed to agree on a single multi billion-euro fund to bail out their Central and Eastern European members.
In a concluding statement, EU leaders underlined the importance of macro-financial stability throughout the EU, but said they will review the assistance already made available, recognizing clear differences between the member states in Central and Eastern Europe.
Hungarian Prime Minister Ferenc Gyurcsany had called for a special EU fund of up to 190 billion euros (241 billion U.S. dollars) to bail out Central and Eastern European countries, which was rejected by German Chancellor Angela Merkel ahead of the summit.