EU leaders back sweeping financial rules
BERLIN -- European leaders mounted a united front against the global financial crisis Sunday, proposing sweeping new market regulations, but it remained unclear whether economic giants like the United States and China would go along.
Heads of government and finance ministers from Europe's largest economies joined German Chancellor Angela Merkel in Berlin to lay the groundwork for a common European position on economic reforms before an April 2 summit of the Group of 20 nations in London.
"Europe will own up to its responsibility in the world," Merkel told reporters following the talks.
Leaders from Britain, France, Germany, Italy, Luxembourg, Spain, the Netherlands and the Czech Republic agreed to press for sanctions on tax havens, caps for managers' bonus payments and a stronger role and increased funding for the International Monetary Fund.
While the plans were based on an agenda adopted by the G-20 in November, the measures announced Sunday were more far-reaching and concrete, particularly on long-disputed issues such as hedge fund regulation.
However, analysts say other G-20 members, including the U.S., China, Japan and developing nations like India and Brazil, might not share Europe's zeal for blanket global regulations.
During Germany's turn at the presidency of the Group of Eight two years ago, Merkel pushed hard for more transparency on global financial markets and, especially, hedge fund regulation. But her efforts ran into against stiff resistance from Washington and London.
Even the global crisis and a change of administration may not be enough to convince the U.S. to hand over its autonomy.
"I see the U.S. as wary of giving away powers of oversight and regulation," said Robert Brusca of New York-based Fact And Opinion Economics.
Financial industry leaders, on the other hand, may have lost too much credibility in the current crisis to fight off heavy restrictions on their practices.
"What the industry thinks is irrelevant," Brusca said." It has squandered any good will it had by being given a leash of self regulation — then running amok."
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