The leaders of Britain, France, Germany and Italy and the president of the EU Commission have declared themselves agreed on how to tackle current issues in the global economy following the recent "credit crunch".
And British prime minister Gordon Brown - who hosted last night's unofficial "summit" at 10 Downing Street - has expressed confidence they are "leading the way" in the search for consensus, promising "big changes" and "big reforms" later this year providing "greater transparency" and better "early warning systems" to secure better informed markets.
At a press conference in the foreign office, Mr Brown said he and his counterparts - French president Nicolas Sarkozy, German chancellor Angela Merkel, Italy's caretaker prime minister Romano Prodi and Commission president José Manuel Barroso - had agreed the need for the reform of economic institutions to meet the challenge of future shocks to the world economy. And Mr Brown confirmed G8 finance ministers meeting in Japan next week would examine the detail of proposals to change the way credit agencies assess risks posed by banks and for greater transparency in the information published by banks themselves.
President Sarkozy said he could not accept that lack of transparency "should jeopardise the growth we all need", while Mrs Merkel held open the prospect of resort to stronger regulation if calls for greater transparency are denied.
Mr Brown echoed that warning, saying there needed to be "common principles" guiding international financial management. He also renewed his suggestion that the International Monetary Fund (IMF) should assume an additional "early warning" system to head-off crises such as the run on Northern Rock.
In a statement ahead of last night's talks, Mr Barosso said it was clear the recent turmoil in the financial markets required vigilance and that excessive volatility affects confidence throughout the economy.
While we could not be complacent, however, he insisted: "We can be confident. The fundamentals of the EU economy are sound. We have the lowest unemployment rate for 25 years. We have a positive current account balance. The euro is strong. We remain on the growth path."
Mr Barroso's comments came as the IMF said world economic growth would slow significantly in 2008, but that the US, whose housing market downturn has rattled the global markets, would avoid recession.
In their communiqué last night the leaders said the longer-term response should be guided by three principles. First, primary responsibility for managing risk is and must remain with individual financial institutions and investors. Second, this needs to be backed up by strengthened national regulatory and supervisory frameworks, and third, regulatory authorities in different countries need to co-operate and exchange information effectively in the EU and internationally to prevent and manage crises and contagion.
