EU LEADERS will meet US president George Bush tomorrow near Washington to finalise plans to hold a summit of world leaders to reform the global financial system.
French president Nicolas Sarkozy and European Commission president José Manuel Barroso want to win US backing for the plan, which the French leader said would launch a "refoundation of capitalism".
They will travel on to Beijing next week to hold talks with Chinese premier Wen Jiabao on the financial crisis, which investors fear is threatening to turn into a global recession as banks cut back on their lending.
"We had the emerging market crisis, we had the internet bubble, now we have this massive crisis," said Mr Sarkozy, who together with British prime minister Gordon Brown wants a "Bretton Woods II" summit - named after the 1944 meeting in the US that established much of the current financial regulatory framework such as the International Monetary Fund.
The G8, which is composed of the US, UK, France, Italy, Germany, Canada, Japan and Russia, have all agreed to attend the summit.
A G8 statement said co-ordinated reforms had to be made to the "regulatory and institutional regimes for the world's financial sectors to remedy deficiencies exposed by the current crisis.
"We look forward to a leaders' meeting with key countries at an appropriate time in the near future to adopt an agenda for reforms to meet the challenges of the 21st century," it continued.
Mr Sarkozy has said he hopes that other developing powers such as China, India and Brazil will attend. But the attendance list could be wider with Spanish prime minister José Luis Rodríguez Zapatero saying yesterday that he also wanted to attend the meeting.
The international summit is most likely to be held next month or in December and Mr Sarkozy suggested that the president-elect in the US could be invited to attend.
In Brussels, Mr Brown unveiled a package of reforms that included setting up "colleges of national supervisors" to regulate financial institutions operating in different countries and continents; reform of the IMF and World Bank; and an early warning system
However, international observers believe the European initiative could face some resistance from the US, which long dominated the world of international finance until the recent crisis.
"The US got what it wanted in 1944 and, I suspect, will do so again simply because the Europeans won't be able to decide what they want," said Martin Weale, director of the National Institute of Economic and Social Research in London.
Taoiseach Brian Cowen, who also attended the EU meeting in Brussels, said he supported the EU initiative. "We need a global response for a global crisis," he said and added that Ireland had benefited enormously from EU membership.
"On the financial front, Ireland would have been in a far worse position had it not been for our membership of the EU, the euro and the role the European Central Bank played in recent weeks and months," said Mr Cowen, when asked if Ireland could have faced the same problems as Iceland if it had not had access to ECB funding and EU support.
Separately, EU leaders vowed to take action to underpin growth and jobs threatened by the global financial crisis.
"Outside the financial sector, the European Council [summit] underlines its determination to take the necessary steps to support growth and jobs," the final summit statement said. "It calls on the European Commission to make appropriate proposals before the end of the year notably to preserve the competitiveness of European industry." - (Additional reporting Reuters)
