World financial crisis

Asia-Europe united call for regulation

Article published on the 2008-10-25 Latest update 2008-10-28 16:06 TU

France's Sarkozy (C) with India's Manmohan Singh (L) and European Commission chief José Manuel Barroso
(Photo: Reuters)

Asian and European leaders have issued a joint call for financial reform and regulation in response to the crisis shaking world markets. At the end of the Asem Asia-Europe summit in Beijing, Chinese Prime Minister Wen Jiabao backed calls for more regulation and pledged to back them at the G20 world summit on 15 November, as did India's Manmohan Singh.

A joint statement after the 40-member Asem summit called for "effective and comprehensive reform of the international monetary and financial systems".

Wen called for lessons to be drawn from the crisis.

"We need to handle correctly the relationship between financial innovation and regulation," he told reporters. "We need financial innovation to serve the economy better, however we need even more financial regulation to ensure financial safety."

UN Secretary-General Ban Ki-Moon called for the November meeting to address "market and regulatory failures" as a matter of urgency.

Leading the European Union delegation, French President Nicolas Sarkozy had called for a united Asia-Europe front.

"With Asia and the European Union, we will be 12 at the G20," a presidential adviser told RFI's Véronique Rigolet in Beijing. "That's a majority, a considerable driving force which could force the Americans to accept real reform and not just a facelift for the system."

Sarkozy also met German Chancellor Angela Merkel to try and smooth over differences over his plan for a French sovereign wealth fund and to discuss for an effective EU-wide economic authority.

World stockmarkets plummeted Friday. Sao Paulo's stock exchange shed another 6.9 per cent, as Brazil's central bank promised to inject 50 billion dollars to support its country. Mexico sold 1.4 billion dollars to prop up the peso.

With most of the world closed for the weekend, Saudi Arabia's stockmarket, which is the biggest in the Arab world, plundged nine per cent early Saturday to its lowest point for four years.

US carmaker Chrysler announced Friday that it will sack up to a quarter of its white-collar workforce, shedding up to 5,000 jobs.

In his weekly radio address, President George Bush defended free-market policies, ahead of the November summit.

"As we focus on responses to our short-term challenges, our nations must also recommit to the fundamentals of long-term economic growth - free markets, free enterprise, and free trade," he told the nation.

The economic situation is becoming a decisive factor in the US presidential election. Republican candidate John McCain is on the defensive over Bush's handling of the economy.

Workers fearing for their jobs are turning to Democrat Barack Obama, according to Philadelphia trade union leader Pat Eiding.

"There’s nobody in the labour movement that I know that has a job that isn’t concerned now," he told RFI's David Page.