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EU indicates platform for global finance summit

07 November 2008

Preparations for the global financial reform summit are hotting up. EU leaders, who met in Brussels today, will apparently call on the Nov. 15 global finance meeting to agree immediately on five principles. These are to:
- Increase surveillance of ratings agencies; 
- Align accounting standards; 
- Close loopholes;
- Set banking codes of conduct to reduce excessive risk-taking, and;
- Ask the International Monetary Fund to propose measures to calm the turmoil.

Press reports indicate that Europe may suggest giving the International Monetary Fund more power to curb financial crises, and give it more money to aid countries in trouble.

EU Economic Affairs Commissioner Joaquin Almunia said on Spanish public radio RNE. "We have to make the players of the international financial system more accountable, increase transparency and discourage excessive risk taking. We have to regulate better all those who operate on financial markets, not leave financial activity without regulation," he said. Tighter regulation of hedge funds was also mentioned by Almunia as a necessary "short-term" measure.

The Europeans have said nothing about whether they are prepared to slim down their representation in international institutions, such as the IMF, nor on how countries not participating in next week’s G20 summit can have their voices heard.

Chinese Foreign Ministry spokeswoman Jiang Yu said last week that the international community should, from a long-term point of view, conduct effective and comprehensive reforms of the international financial system, based on full consultation by all stakeholders. “The international community should promote the building of a fair, equitable, inclusive and orderly international financial system, to provide an effective guarantee for the sustained stable development and prosperity of world economy".

Civil society organisations will not be satisfied with the proposals coming from European leaders. They are preparing public actions next weekend, writing statements and engaging their governments to demand more dramatic and inclusive reform proposals.

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