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EU Finds 'Common Position' On Reforming World Financial System

French President Nicolas Sarkozy, whose country currently holds the EU presidency, has said European leaders have found a common position in reforming the world financial system.

They met in Brussels on November 7 to discuss EU coordination ahead of a global summit on financial reforms in Washington on November 15.

As the world faces global financial turmoil, European Union leaders have said they want to prevent the repeat of the Wall Street excesses that resulted in chaos in markets worldwide.

In their meeting in Brussels on Friday, EU leaders suggested the creation of an early warning system that would watch for financial bubbles and prevent dangerous imbalances, such as the growing U.S. trade deficit.

French President Nicolas Sarkozy, who chaired the meeting, said the EU leaders have agreed on "the need to take firm" decisions at the Washington financial summit next week.

The summit of 20 of the world's richest nations and emerging economies, known at the G-20, is to take place on November 15.

Sarkozy said the summit should pave the way for reforms of the international financial system and be followed up in 100 days at the second summit.

Both Sarkozy and European Commission President Jose Manuel Barroso said the Washington summit should not be "just talk for talk's sake," because the world is in economic crisis and has "no time to lose."

"The Washington meeting cannot fail," Barroso said. "This was also one of the messages in today's discussion. It cannot fail. It has to be a real, historic meeting, not just about general principles, but also with concrete decisions."

The Associated Press news agency reported that EU leaders will call on attendees at the Washington summit to agree on five principles: submit ratings agencies to more surveillance; align accounting standards; close loopholes; set banking codes of conducts to reduce excessive risk-taking; and ask the International Monetary Fund (IMF) to suggest ways of calming the turmoil.

Sarkozy said he sees the Washington summit as a "new Bretton Woods" -- referring to the 1944 meeting that led to the creation of the IMF and other global institutions. He said, "We want to change the rule of the game."

However, the IMF managing director Dominique Strauss-Kahn warned that world leaders should not have high expectations from the Washington summit.

Strauss-Kahn told the "Financial Times" that changes do not happen overnight and that the Washington meeting would not create a new international treaty.

In the meantime, a spokeswoman for U.S. President-elect Barack Obama said he would not attend the G-20 summit next week.

Compiled from agency reports