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Bush, EU Leaders Propose World Summits On Financial Crisis

Sarkozy (left), Bush, and Barroso announced talks to deal with the crisis.
U.S. President George W. Bush and European Union leaders have announced plans for a series of world summits to discuss how to respond to the global financial crisis.

The first summit is due to take place in the United States soon after the November 4 U.S. presidential election, although a precise date and site have yet to be selected.

The announcement came after Bush, French President Nicolas Sarkozy, and European Commission President Jose Manuel Barroso met on October 18 at Bush's Camp David retreat outside Washington.

Sarkozy, whose country currently holds the rotating presidency of the European Union, told a joint news conference that the crisis calls for a coordinated global response.

"We have come on behalf of Europe to say to the great American nation that we want to build a new world, the world of the 21st century; that we want to join hands in building this world with you, but that we don't want to waste any time," Sarkozy said.

"We want a summit -- as the G8 [Group of Eight leading industrialized] nations and no doubt the G5 nations have declared -- in order to find solutions all together, including with Asia."

UN Secretary-General Ban Ki-moon, who met Sarkozy in Canada on October 18, has also stressed the urgency of addressing the crisis. He offered the UN headquarters in New York for a meeting that he said should take place "in early December at the latest."

Sarkozy said the summit would provide an opportunity to overhaul the global financial system established after World War II:

"This crisis could be an opportunity if we don't fall back into the hateful practices of the past, practices that have brought us to where we are now," he said

The French president said Bush "is right to say that protectionism and withdrawal into oneself would be a catastrophe. He is right to say that questioning market economy would be a catastrophe. Nonetheless, we cannot continue with the same causes that will have the same effects. Market economy needs rules. Freedom can exist only if there is responsibility, if those at fault bear responsibility for it."

New Financial Architecture

A number of European leaders have called for a broad reform of the global financial system to avoid a repeat of the current crisis, which has prompted fears of a worldwide recession.

Sarkozy has proposed reforming rating agencies and even reviewing the relationships between major world currencies. British Prime Minister Gordon Brown has urged radical changes to the global capitalist system, including an international mechanism to monitor the world's largest financial institutions.

Barroso said on October 18 that it was time for "a new global financial order."

Bush, who has just three months left in office, has been more cautious. He stressed that the basic principles of democratic capitalism must be respected.

"As we make the regulatory and institutional changes necessary to avoid a repeat of this crisis, it is essential that we preserve the foundations of democratic capitalism -- a commitment to free markets, free enterprise, and free trade," Bush said at Camp David.

"We must resist the dangerous temptation of economic isolationism and continue the policies of open markets that have lifted standards of living and helped millions of people escape poverty around the world."

Bush has earlier pledged that Washington's plan to inject $250 billion into U.S. banks did not herald a new era of government interference with the private sector.

Congress this month approved a $700 billion plan to buy bad assets from banks and other institutions to shore up the financial industry.

The summit announcement comes as the credit crunch continues to rock markets around the globe.

Russian Finance Minister Aleksei Kudrin said investors pulled $33 billion out of the country between August and September.

And South Korea on October 19 unveiled a rescue package worth $130 billion in state guarantees and capital injections.

compiled from agency reports