Source: Xinhua

03-14-2009 16:48

Special Report:   Global Financial Crisis

BRUSSELS, March 13 (Xinhua) -- In an apparent showdown with the United States weeks ahead of the G20 summit in London, Germany and France joined hands in pushing for tougher global financial regulations, while rejecting Washington's call for more spending on economic stimulus.

However, it is uncertain whether members of the European Union (EU) will put aside their differences to forge a coordinated stance during the London Summit slated for April 2.

A policeman climbs stairs outside the hotel hosting the G20 Finance  Ministers meeting near Horsham, in southern England March 13, 2009.  (Xinhua/Reuters Photo)

FOCUSING ON TOUGHER REGULATIONS

After a joint meeting of their cabinets in Berlin on Thursday, German Chancellor Angela Merkel and French President Nicolas Sarkozy said it was crucial for the London summit to achieve "concrete results" on the regulatory agenda.

"In Washington we agreed on principles, in London we want to see results," Sarkozy said, referring to the first G20 summit on the financial crisis last December in the American capital.

"The point is to implement the action plan from Washington," Merkel said. "That means: regulation, introducing transparency to the financial markets, strengthening multilateral institutions."

Merkel said she agreed with Sarkozy that the upcoming London summit should carry out pledges made at a mini EU summit in Berlin last month.

In an effort to hammer out a common EU position in the London summit, leaders of Germany, France, Britain, Italy, Spain, the Netherlands, the Czech Republic and Luxembourg endorsed a plan to press for tighter regulation of "all financial markets, products and participants, including hedge funds and other private pools of capital which may pose a systemic risk."

France and Germany "underline today that all hedge funds and private pools of capital that could constitute a systemic risk, should be subject to appropriate regulation and supervision," the two leaders said.

Strengthening financial rules has been a key demand of the EU in its call for a new global financial order after the 27-nation bloc was deeply mired in the current financial crisis, which was largely blamed on lack of regulation in the U.S.