EU finance ministers stepped up the pressure today for the injection of a stiff dose of tougher regulation into the global financial system in the face of US resistance.
The ministers, meeting in Brussels, rallied around a French call for no financial institution, market or jurisdiction to fall outside of regulators' reach, according to French Finance Minister Christine Lagarde.
'We have found a convergence of views on reinforcing oversight, on fundamental principles and values that we believe in,' Lagarde said after chairing a meeting with her EU counterparts.
The European Union, under its current French presidency, has led calls for a broad overhaul of global financial architecture, which it hopes will be launched at an international summit in Washington on November 15.
'Everything should be regulated in the future,' said Dutch Finance Minister Wouter Bos. 'The time has come when we can no longer just trust self-regulation,' he added.
After the finance ministers, EU leaders are to fine-tune Europe's contribution to international efforts to reshape the global financial order at a brief summit on Friday in Brussels.
That meeting is itself supposed to prepare the ground for the Washington gathering. The current financial crisis first erupted in the US, but Washington has shown little interest in more regulation, lthough it remains to be seen what approach a new US president will take.
The White House yesterday played down the prospects for 'concrete' results from the November 15 economic crisis summit, amid calls from France for the gathering to yield specific proposals.
In view of the meeting on Friday, France presented finance ministers a series of proposals ranging from measures to limit bankers' bonuses, to ensure that no niche in the financial markets escapes regulation and shaking up the International Monetary Fund.
On the IMF, France supports a British call for the institution to take on new responsibilities to serve as an early warning system for economic and financial trouble spots.
The French EU presidency also wants regulatory oversight of credit rating agencies and hedge funds to be tightened and accounting standards to be reviewed.
Meanwhile, EU finance ministers today supported a proposal to more than double the amount of money available to the bloc's non-euro members in case they run into economic troubles.
'We have favourably reviewed the European Commission's proposal to reinforce the line of support to a proposed amount of €25 billion,' said French Finance Minister Christine Lagarde.
Last week, the European Commission proposed to more than double the maximum EU aid available to non-euro member states facing economic trouble to €25 billion.
Under a 2002 rule, the European Union can provide up to €12 billion in total financial assistance to member states that do not use the euro when they run into a balance of payments crisis.
Last week, the EU offered to provide Hungary €6.5 billion in aid as part of a €20 billion package put together with the International Monetary fund and the World Bank. The ministers approved the plan today.
Meanwhile, Finance Minister Brian Lenihan said that the Government is in the process of implementing the Budget, which is part of its medium term strategy to restore stability to the public finances.
He said that the EU Commission's economic forecasts published yesterday are very similar to the Government's projections for next year. There are differences in the 2010 forecasts as the EU Commission's figures are prepared on a no policy change basis.
He said that the EU Commission's forecasts reinforce the importance of the Budget's primary objective of bringing stability to the public finances.
The Minister acknowledged that if the public finances deteriorate further than the forecasts set out in the Budget next year, then further cuts in public expenditure would have to be considered.
