BRUSSELS, Belgium – European Union leaders backed a 100-day deadline for world's leading economies to decide urgent global finance reforms, French President Nicolas Sarkozy said Friday.
Sarkozy, who chaired a special meeting of EU nations, said the financial crisis and economic downturn required a quick deal on an overhaul at a Nov. 15 summit in Washington bringing together leaders of the world's 20 largest industrialized nations and emerging economies.
"We are in an economic crisis. We have to take this into account," Sarkozy said. "We have to react and we have no time to lose."
"I'm not going to take part in a summit where there is just talk for talk's sake," Sarkozy told reporters after talks between the heads of the EU's 27 nations. "We want to change the rules of the game in the financial world."
The EU is calling for a second global summit next spring to flesh out changes to the way the world economy is governed. They want to see far more supervision of big financial companies and are urging governments to jointly monitor them.
They want to prevent a repeat of the Wall Street excesses that caused havoc in markets worldwide — and are bringing emerging economies China, India and Brazil on board for talks on shaping a new world economic order.
British Prime Minister Gordon Brown said the Washington talks should be a "decisive moment for the world economy."
A text agreed by EU leaders says they want an early warning system that would watch for financial bubbles and prevent "world imbalances" — such as the swelling U.S. trade deficit.
They also suggest making the International Monetary Fund the world's financial watchdog, giving it more power to curb financial crises, with more money to aid countries in trouble.
The Europeans also want to close loopholes that allow some financial institutions to evade regulation, and ensure supervision for all major financial players, including ratings agencies or funds carrying high amounts of debt.
The leaders in a declaration called for greater transparency in markets that would no longer omit "vast swathes of financial activity from auditable, certifiable accounts." It also said "excessive risk-taking must be overhauled," a reference to the sale of high-risk debt securities and executive pay that may reward risk-taking.
EU leaders will call on the Nov. 15 summit to agree immediately on five principles: submit ratings agencies to more surveillance; align accounting standards; close loopholes; set banking codes of conduct to reduce excessive risk-taking; and ask the International Monetary Fund to suggest ways of calming the turmoil.
Brown also said more oversight of the world's 30 largest financial group "can be set up very quickly." He wants regulators to talk regularly with counterparts in other nations about banks that operate across the world.
To date, European governments alone have committed some 2 trillion euros ($2.6 trillion) in cash injections, bank deposit guarantees, interbank loan coverage and partial or full nationalization to prop up consumer and business confidence.
The damage done worldwide is fueling a search for a "new Bretton Woods" — a reference to the July, 1944 conference in New Hampshire that shaped the international financial system for decades.
In Washington, there is little desire in the waning days of the Bush administration for a major overhaul of financial regulations.
But the United States and European nations are no longer the only players. China and Brazil and India are jumping at the chance to join a major international effort.
G-20 finance officials nations will meet this weekend in Sao Paulo, Brazil, to prepare next week's summit. This may pave the way for emerging economies to play a larger role in global finance talks. France is suggesting bring them on board as members of the exclusive world club of G-8 industrialized nations which regularly meets to discuss the global economy.