German Chancellor Angela Merkel (C) pose with European leaders for a family picture after a meeting in the Chancellery in Berlin, February 22, 2009. European leaders met in Berlin on Sunday to agree a common stance on overhauling global financial rules but their summit risked being overshadowed by concerns about the fragility of euro zone and eastern European states.[Xinhua]

Major European Union countries agreed Sunday on a plan to inject new momentum into efforts to overhaul the global financial system with the help of international organizations ahead of an April summit of the Group of 20 nations in London.

The meeting, attended by leaders of Britain, France, Italy, Spain, the Netherlands, the Czech Republic and Luxembourg, as well as the European Commission president, finance ministers and central bank governors, was aimed at forging a common European position ahead of an April summit of the Group of 20 nations in London.

The leaders stressed in the Chair's Summary that all financial markets, products and participants, including hedge funds and credit rating agencies should be put under tougher supervision or regulations as transparency and accountability on the part of all financial market participants are indispensable for the stability of the global financial markets.

German Chancellor Angela Merkel, France's President Nicolas Sarkozy and Italy's Prime Minister Silvio Berlusconi (L-R) chat at a news conference after a meeting in Berlin, February 22, 2009. European leaders met in Berlin on Sunday to agree a common stance on overhauling global financial rules but their summit risked being overshadowed by concerns about the fragility of euro zone and eastern European states. [Xinhua]

The leaders agreed to advocate reforms to ensure that banks build additional buffers of resources in good times, and encourage the working international organizations in this field, like Financial Stability Forum (FSF), Basel Committee on Banking Supervision, EU Commission to submit appropriate recommendations as soon as possible, the Chair's Summary said.

They also called for tougher sanction mechanisms against tax havens and "uncooperative" financial centers and asked the Financial Action Task Force (FATF), Organization for Economic Co-operation and Development (OECD) and FSF to submit proposals in their respective fields to the G20 Finance Ministers Meeting in March, for review at the London Summit.

The Chair's Summary also called for establishing an effective early warning system by the close cooperation of International Monetary Fund (IMF) and FSF, asking them to present "concrete proposals based on this exercise to the IMF committee and the G20 prior to the IMF Spring Meeting.

"The leaders also want to strengthen those international organizations and set up new ones to fulfill their tough jobs better in this current crisis," the Chair's Summary said.

"We thus have agreed today to support doubling the funds available to the IMF. The IMF must be in a position to help its members swiftly and flexibly when they experience difficulties with respect to their balance of payments and accessing capital markets.

"We agreed to work with the IMF and World Bank on a clear process and timetable for reforming the governance of these institutions to reflect the changing nature of the world economy and to make them more responsive to future challenges," the Chair's Summary said.

Besides, the EU leaders committed to restore the market's confidence by promising to assist systematically important financial institutions, to limit their future risks.

"We must also devote our best efforts to securing credit flows from banks to firms and households," the Chair's Summary said.

They agreed to ensure sustainable economic policy and return to the path of a sustainable budgetary policy as soon as possible.

"We must ensure that public finances are sound in the long term also as a prerequisite for the enduring effectiveness of our current measures," the Chair's Summary said.

The leaders also expressed their strong positions against protectionism, saying "free trade and openness to cross-border investment are important preconditions for ensuring that economic momentum is sustainable and regained on a global scale."

They wanted to achieve a breakthrough in the Doha Round of WTO negotiations in the coming months to safeguard the global economy against protectionism, saying "at the London Summit leaders should send a powerful message to this effect."

The leaders also said the economic and financial crisis can not reduce the global efforts to fight climate change. "This year's UN Climate Change Conference in Copenhagen must agree on the global efforts needed to curb climate change. We will contribute to this goal in London."

(Xinhua News Agency February 23, 2009)