- The Washington Times - Thursday, November 6, 2008

BRUSSELS | EU finance ministers are telling France that it is going too fast, too soon with plans to push for concrete global financial reforms at a Washington summit next week.

France is trying to create a consensus within the European Union to push for stricter financial regulation.

But diplomats present at the EU ministers’ talks on Tuesday said there was no support for an ambitious push for global financial regulation when the crisis may not have peaked.

Governments “need to put out the fire first,” said a diplomat who declined to be named because he is not authorized to talk to the press.

Despite other countries’ reservations, French Finance Minister Christine Lagarde said there was “massive support” in general from EU nations for more worldwide financial supervision and for boosting the powers of the International Monetary Fund in containing the financial turmoil.

“At the moment, clearly there is urgency, and there is a demand that we move ahead,” she said.

The crisis of confidence in the banking sector has increased the cost of borrowing, sent shares plummeting and caused massive swings in currencies in recent weeks.

The European stance may lower expectations for the Washington G-20 summit, the first talks between major economies on reforming the global financial system. It takes place a week after the election of a new U.S. president and may only kick off a series of global summits on the crisis instead of tackling sweeping measures.

The G-20 includes the G-7 industrialized democracies and emerging economic powers such as Brazil, India, Russia and China.

Ms. Lagarde said Europe was keen to get other parts of the world on board to seal off loopholes that allow some nations to shun regulation and help financial players evade strict supervision.

“We need to work hard and proceed on as global a basis as possible to eliminate this risk,” she said.

In Berlin, German Chancellor Angela Merkel said she hoped the meeting would secure support from leaders to negotiate “a new financial constitution, in which we demand more transparency” over the next few months.

EU nations agree that the IMF should be strengthened and would like more coordination among financial supervisors across the world - but want more time to discuss how that should be done. France and Britain have called for groups of regulators to monitor major multinational financial groups - which might see European and U.S. supervisors swap information about banks in their regions.

Mrs. Merkel said the IMF should take over that role and oversee financial companies that are active in several regions.

EU leaders will meet Friday to agree what European nations should ask for at the global summit.

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