Europe’s diplomatic shuttle moves to Washington this weekend in a bid to calm financial world markets.
French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso have been invited to Camp David by US President George Bush to talk about plans for an international financial crisis conference expected to take place in New York next month.
The Camp David visit was announced during a Brussels EU summit which committed the 27 leaders to tighten European banking supervision, and crack down on executive pay packages which reward failure as well as success.
The final summit declaration said the EU had to work with its international partners on “genuine, all-encompassing” reform of the global financial system.
Prime Minister Gordon Brown, hailed as a hero for setting the benchmark for credible government bail-out schemes across Europe, emerged from the talks saying the next stage was sweeping long-term financial reforms based on five principles: transparency, sound banking, responsibility, integrity, and global governance.
Mr Brown said the forthcoming talks, built around the G8 group of most industrialised countries, would have to create an “early warning system” to anticipate future financial downturns, coupled with comprehensive financial supervision and monitoring systems designed for a global economy.
Mr Brown said it would be a “Bretton Woods”-style gathering – a reference to the 1944 meeting which set a post-war financial order, including setting up the International Monetary Fund.
Europe’s crisis response began with emergency talks in Paris between the four EU countries who are part of the G8 – France, the UK, Germany and Italy.
Then the EU’s 27 finance ministers met in Luxembourg to produce a declaration designed to calm markets.
Next came last Sunday’s meeting in Paris of the leaders of the 15 EU single currency countries – plus Mr Brown, whose template for bailing out struggling UK banks was seized upon as the best available plan.
At today’s EU summit in Brussels, the Prime Minister shrugged off the praise and insisted no one leader could resolve the current crisis and Europe had to pull together.
But Mr Brown is in the forefront, urging that efforts be restarted immediately to win a world trade deal – the deal which eluded the Prime Minister’s new Business Secretary, Peter Mandelson, last summer when he was Europe’s Trade Commissioner.
The Prime Minister said a world trade agreement was a vital part of a global financial revival because it would banish protectionism and drive economic growth.
“We must send a signal that protectionism is unacceptable,” he said.
As the European shuttle moves to America and this weekend’s Camp David talks, Mr Sarkozy and Mr Barroso will try to galvanise Mr Bush to play a full part in global financial reform – even though he will be out of office just weeks after the international conference takes place.
Meanwhile, back at the Brussels summit, Foreign Secretary David Miliband confirmed that some EU nations were getting cold feet about climate change pledges made more than a year ago but still being negotiated.
Eight member states, lead by Italy and Poland, are complaining that the financial crisis means such ambitious targets – a 20% overall cut in CO2 emissions in Europe by 2020 – will have to be revised downwards.
The summit conclusions reflected the new concerns in a declaration which horrified environmental campaigners who fear the “green” European agenda will fall victim to recession.
The vague summit wording called for intensive work to begin to ensure the next EU summit in December can decide on “appropriate” and “cost-effective” green responses “having regard to each member state’s specific situation”.
That sounded to most tonight like an EU loophole – and it came just as Mr Miliband’s brother Ed, the Government’s new Energy and Climate Change Secretary, was setting out controversial UK plans for hugely ambitious mid-century climate change targets.
The plans only increase pressure on the rest of Europe over a climate change policy some say is actually more important than the current financial troubles.
One EU official observed: “Thanks largely to the UK we are all now pulling together to get ourselves out of the red – but we’re pulling part over going green.”