US, European leaders to hold summits on financial crisis

US, European leaders to hold summits on financial crisis

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19th Oct 2008

US and European leaders have agreed to hold a series of summits to reform the global financial system to make it more resilient and ensure continued prosperity in the world.
US President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso said in a joint statement released after their talks that the first summit would be held in the United States "soon after the US elections" on November 4.
The world 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," it added.
Later summits "would be designed to implement agreement on specific steps to be taken to meet those principles," the statement read.

The first of the summits will likely be held in November, but Tony Fratto, a White House spokesman, did not give a date.

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

Sarkozy and Barroso arrived Saturday for a three hour meeting with Bush at the presidential retreat at Camp David in Maryland, outside the US capital.

Just before the meeting, UN Secretary General Ban Ki-moon said he backed the idea of a summit by early December at the latest.

Sarkozy, whose country currently holds the rotating presidency of the European Union, is seeking a bold relaunching of the international financial system. The French president warned that it was urgent to 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," he said at Camp David.

Bush , meanwhile, stressed the importance of preserving "the foundations of democratic capitalism -- the commitment to free markets, free enterprise and free trade."

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.

Fratto said that a location for the first summit had not been determined, though Sarkozy recommended New York, where the crisis began.

Fratto said that Bush, Sarkozy and Barroso proposed a series of summits because it was "too ambitions" to think that the crisis could be solved in one single meeting.

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.

"You have a lot of people talking about Bretton Woods," said Fratto. "Bretton Woods was a three week conference that involved 44 countries at a time when there were a lot fewer countries in the world," he said.

The first summit would be "to discuss the current financial crisis and also to set forth principles that would guide the future follow on," he said.

Of course by then participants "would be interested in the views and the input of whoever the president-elect is," he added.