EU leaders prepare ground for Washington financial summit

EU heads of state have arrived for a meeting in Brussels, aimed at hammering out a common position on the global financial crisis.

French President Nicholas Sarkozy – charged with the rotating presidency of the bloc – called the meeting to prepare for a summit for the world’s largest economies in Washington in a week’s time.

That will be devoted to an overhaul of global financial institutions.

The EU meeting is just the latest in a month-long series of get-togethers.

These have produced repeated pledges of action to recapitalise banks and encourage inter-bank lending to prevent a repeat of the crisis.

France has proposed specific measures, that it wants accepted before Washington and adopted within one hundred days afterward.

These include, among others, a greater role for the IMF, stricter regulation for financial bodies such as hedge funds, and obligatory registration of the rating agencies, among others.

The proposal is a shorter version of a paper discussed by EU finance ministers earlier this week.

Several objected, concerned it could give rise to over-regulation.

One thing is certain, reform will not be rapid, but will require negotiations over several months.