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"EU reaches consensus ahead of global financial talks
European Union leaders meeting in Brussels have reached a common position on the international financial crisis, which they will take to an international summit in Washington next week. President Nicolas Sarkozy of France, which holds the EU's rotating presidency, told reporters that they would use the G-20 talks to call for major changes to the rules that govern the global financial system. He said the European Union would also call for next week's talks in Washington to be followed up be a second meeting early next year. The bloc plans to demand a 100-day deadline for action. It also wants the International Monetary Fund to be given the primary responsibility for recommending steps aimed at restoring consumer confidence and bailing out countries that slip into financial peril."
Germany Has Many Plans and Demands for Finance Summit
Chancellor Merkel has admitted there will be "tough talks" in Washington
Leaders from 20 countries will attend the first World Finance Summit. Germany has many demands, from more transparency and a supervisory position to a worldwide loan registry and a re-evaluation of banking salaries.
German experts compiling a brief for the summit in Washington called Friday in Berlin for a rethink of the way banking executives are paid and for a worldwide loan registry.
The report criticizes short-term performance bonuses for financial executives, saying they were a significant cause of the global financial crisis, according to the officials who saw the document.
The group also called for a world registry of big loans, similar to the database of big domestic credits which Germany already has, so that governments can see at a glance how great the credit risks in the nation are.
The European Union's position at the World Finance Summit this weekend in Washington is also the German position. German Chancellor Angela Merkel had a decisive share in the agreement at the EU summit on Nov. 7, 2008.
Ever since, German Deputy Economy Minister Bernd Pfaffenbach has been travelling around the world in the run-up to Washington to sound out possibilities for an agreement among the participants. And also to campaign for what is important from Germany's perspective.
When the state and government heads from economically important countries all over the world meet in Washington on Nov. 15, in the eyes of the German government it all comes down to one thing: "For us it is important that we draw the right conclusions from the current financial crisis," says government spokesperson Ulrich Wilhelm. "And that through a range of agreed upon measures, we ensure that such a financial market crisis does not happen again."
Merkel hopes for fast results
The participants need to define joint goals in Washington
The German government will be hoping for quick results. But as Merkel's spokesman indicated, it's unlikely the summit will produce that. But joint goals have to be defined there and then deliberated intensively afterwards between the participants. The results should then be examined at another summit just weeks away.
According to Wilhelm, the federal government wants to convince the partners to enforce more transparency for financial products and that in addition the incentives in the financial market to seek short-term gain under high risk are removed.
The government also wants to convince the summit's participants that "we also need stronger supervision, for example regarding the question of equity configuration, the regulation of non-banks," explains Wilhelm. "Furthermore, we also need to introduce a monitoring role on an international level."
Will Dominique Strauss-Kahn, IWF Chief, take on a supervisory role for the financial markets?
This will be one of the most controversial points in Washington. The German government wants to delegate this monitoring role to the International Monetary Fund, which is also the European Union's position. Other countries reject this proposal.
The German government's demand to regulate the financial markets more strongly is not just a reaction to the current crisis.
Merkel had already requested a code of conduct for hedge funds at the G8 summit for leading industrial nations in Heiligendamm in the summer of 2007. It failed however due to resistance from the US and the UK. But all the same: Work orders were then assigned to international expert bodies like the financial market stabilization forum. This preliminary work can now help in reaching an effective regulation quickly.
Originally posted by pieman
the EU is designed to propagate international economic cooperation, i really don't find it entirly surprising that the EU suggestion on how to solve the crisis is an enlargement of the sytem they are presently using.
everyone is suggesting more of the same in a bigger way, same as the EU.