Gordon Brown at EU finance meeting
By Toby Helm in Paris
Gordon Brown and other European Union leaders called last night for a global economic summit to ‘rebuild the world’s financial system’ as they held emergency talks on how to prevent a repeat of the current international credit crisis.
At a hastily convened meeting in Paris, French President Nicolas Sarkozy said the heads of the EU’s four biggest economies – Germany, France, the UK and Italy – were united on the need to call all leading economic nations together to create ‘a new financial world just as Bretton Woods did 60 years ago’.
The summit, planned for next month, is expected to include the G8 leading industrial nations, as well as India, China, South Africa, Brazil and Mexico. Sarkozy, who called last night’s meeting in his role as EU President, said it was time for governments to clamp down on speculators and restore a moral element to the heart of a regime that had failed.
‘We need to literally rebuild the international financial system. We want to lay the foundations of entrepreneurial capitalism, not speculative capitalism,’ he said.
As part of a rolling programme of announcements, the EU’s ‘big four’ agreed to release £12bn of emergency aid to ailing small businesses across the EU immediately, and a further £12bn as soon as possible after that. The European Investment Bank had said the money would be released gradually over the next four years.
Calling for a more co-ordinated response to the credit crisis, Brown said international co-operation on regulation was needed. ‘We are seeing, in addition to the national action we are taking, that these global problems about oil, about the credit crunch, need global solutions,’ he said. ‘I think in the next few weeks we have got to show how we can do more in Britain and across Europe to help small businesses, as well as households, through what is a difficult economic time but where I believe Britain can lead the way out of the difficulties.’
Action was needed, and would be taken, to protect all solvent banks in the EU. ‘I want the message to go out from this meeting today that no sound solvent bank should be allowed to fail for lack of liquidity,’ Brown added. The meeting’s main pledges on restoring sound financial systems will be looked at next week by finance ministers from all 27 EU states during talks in Luxembourg.
Germany repeated its opposition to the use of taxpayers’ funds to help ailing banks after calls from France for a European equivalent of the $700bn US bail-out agreed on Friday night. Germany’s Economy Minister, Michael Glos, said such a €300bn rescue fund was a non-starter. ‘I do not think it can be justified in this situation to ask the state to restore trust that has been gambled away with large-scale debt relief plans financed by tax money,’ he said.