EU leaders to debate new model for world finance
Today @ 09:15 CET
EUOBSERVER / BRUSSELS - EU leaders are meeting in Brussels on Friday (7 November) to have lunch, with an overhaul of the international finance system the sole item on the menu.
France - currently sitting at the EU's helm - has tabled a three-page document consisting of five key priorities that "should be agreed no later than on 15 November," when global economic players meet to discuss the same topic in Washington.
The French priorities seek regulation of all aspects of financial markets (Photo: wikipedia)
The priority list, seen by EUobserver, suggests that no market segment, territory and financial institution, including hedge funds, should escape regulation or supervision.
It urges obligatory registration of the rating agencies; the convergence of accounting rules; and a review of the way in which the fair‑value rule in financial institutions is applied.
The International Monetary Fund (IMF) should also be given primary responsibility to recommend the necessary measures to restore confidence and stability as well as the necessary funds and the appropriate instruments to support countries in difficulty, Paris says.
The French EU presidency wants to see all five priorities translated into "concrete, operational proposals" within 100 days from a G20 summit in mid-November.
The summit, hosted by the US, will bring together the G7, the EU and 12 other major economies: Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.
The three-page paper to be discussed by EU heads of state and governments is a shorter version of a document - labelled International Financial Architecture - that was discussed by EU finance ministers earlier this week (4 November).
At the time, French finance minister Christiane Lagarde said the French initiative enjoyed "massive support" among member states, except for a suggestion to "encourage an internationally co-ordinated response to the macroeconomic challenges to come."
This point was objected to by countries such as Germany, one EU diplomat told EUobserver, as it could imply a possibility to shape economic policies above the national level.
According to another diplomat, some ministers expressed concerns about potential over-regulation, with Sweden reportedly objecting tight regulation of hedge funds. "We should not turn financial markets into steady waters," the diplomat said.
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