US to host global crisis summit
CAMP DAVID
20/10/2008 1:00:00 AM
US and European leaders have agreed to hold a series of summits to make the global financial system 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 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 would ''review progress being made to address the current crisis and to seek agreement on principles of reform needed to avoid a repetition and ensure 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''.
Mr Sarkozy and Mr Barroso joined Mr Bush yesterday for a three-hour meeting at the Camp David presidential retreat near Washington.
Mr Sarkozy, whose nation currently holds the rotating presidency of the European Union, is seeking a bold re-launching of the global financial system. He warned it was urgent to stabilise markets ''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.
Mr Bush stressed the importance of preserving ''the foundations of democratic capitalism the commitment to free markets, free enterprise and free trade''.
Fall-out from the crisis intensified as fresh job losses across the US and Europe were blamed on the turmoil.
And bank chiefs faced a backlash after corporate statements revealed that some workers at Wall Street's leading banks were to receive pay deals totalling more than $US70billion, much of which is expected to be paid in bonuses, for their work so far this year despite plunging the global financial system into its worst crisis since the 1929 crash.
Financial markets closed last week with more wild swings and US data showed starts on building new homes slumped another 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.
White House spokesman Tony Fratto said Mr Bush, Mr Sarkozy and Mr Barroso proposed a series of summits because it was ''too ambitious'' to think the crisis could be solved in a single meeting.
The European leaders are seeking to supplant the Bretton Woods system which governed global finance for decades after World War II.
The first summit would be ''to discuss the current financial crisis and also to set forth principles that would guide the future follow-on''. Of course by then participants ''would be interested in the views and the input of whoever the president-elect is'', Mr Barroso said.
UN chief Ban Ki-moon has supported the call for global financial crisis talks and offered to host them in New York ''in early December''.
Mr Ban said yesterday, ''We both agree that there is no time to lose.''
He offered ''strong support'' for holding ''an expanded, emergency G8 summit to address this urgent problem, which would also include the participation of the Secretary-General of the UN, as well as the heads of the World Bank and the International Monetary Fund.
He proposed holding the talks at the UN secretariat in New York.
''I strongly believe that holding the summit at the United Nations, the symbol of multilateralism, will lend universal legitimacy to this endeavour and demonstrate a collective will to face this serious global challenge.
''We must act together to ensure, above all, that the negative impact of the financial crisis on the world's economies not undermine the major UN efforts to achieve the Millennium Development Goals [to eradicate poverty], fight against the effects of climate change and address the food crisis.''
British prime minister Gordon Brown said in an editorial published yesterday that the world financial crisis had laid bare the weaknesses of unbridled free markets.
But he argued against what he called more intrusive regulation.
Markets worked best when guided by ''an ethic of fairness'', he said.
However, aside from saying that Britain's financial regulator was preparing a new code of conduct to ensure that finance industry bonuses were linked to long-term success, he did not go into specifics.
Britain also plans to boost public spending to help pull its economy through a looming recession. Data due out this week is expected to show that the British economy shrank in the third quarter after zero growth in the second. AFP/AP
