Europe Leading The Way To Financial Reform

Europe wants to take the lead role in overhauling the world's financial system. French President Nicolas Sarkozy is flying to Washington for talks Saturday with President Bush at Camp David. Sarkozy, who is also the chairman of the European Union, just presided over a summit in Brussels that gave unanimous approval to a European rescue package.

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STEVE INSKEEP, host:

It's Morning Edition from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, host:

And I'm Renee Montagne. President Bush is trying to reassure investors and the general public that the government's financial plan will work. He is also trying to reassure those who are concerned about massive government intervention in the economy.

President GEORGE W. BUSH: I know many Americans have reservations about the government's approach, especially about allowing the government to hold shares in private banks. As a strong believer in free markets. I would oppose such measures under ordinary circumstances. But, these are not ordinary circumstances. We took this measure as a last resort.

MONTAGE: The President spoke this morning at the US Chamber of Commerce. This weekend he meets with the French President Nicolas whose just finished leading a summit of European leaders. As we hear from Eleanor Beardsley in Paris, Europe now wants to play the lead role in overhauling the world financial system.

ELEANOR BEARDSLEY: European Union meetings are usually dull affairs, but this one seemed to have real fire power. Some of the leaders arriving at E.U. headquarters in Brussels were treated more like movie stars than politicians as cameras flashed and reporters shouted out questions.

Unidentified Man: OK. Are we at the end of the crisis?

BEARDSLEY: Just prior to the summit, the 15 countries which used the Euro crafted a $3 trillion plan to shore up the continent's banks and get credit moving again. At the Brussels summit, Sarkozy said Europe had unanimously endorsed the plan.

President NICOLAS SARKOZY (France): (Through Translator) The 27 European countries now have a massive and unified response with a clear mandate. Now our priority is our meeting Saturday night with the President of the United States to prepare the global summit the world needs to remake capitalism and its financial and monetary systems.

BEARDSLEY: The global summit, which Sarkozy proposed and Washington initially opposed, will be held before the end of November. Europeans hope to greatly influence the shape of a new financial system. Jose Manuel Barroso is president of the European Union's executive branch, the European Commission.

Mr. JOSE MANUEL BARROSO (President, European Commission): Europe is leading the global response. We must continue to do so. And I believe it is critically important that the United States and Europe, we appear together facing this situation and also coming with concrete proposals for global regulation.

BEARDSLEY: Barroso and other European leaders also want emerging market nations like China, India and Brazil to attend the upcoming meeting. They say they want international coordination and transparency in a new world financial system ending what they describe as domination by a handful of countries. European officials also talk about returning morality to capitalism. British Prime Minister Gordon Brown has clearly come down on the European side despite Britain's special relationship with the U.S. Brown says radical reform is needed not only to prevent another crisis, but to end the current one.

Prime Minister GORDON BROWN (United Kingdom): People need to feel confident that their institutions cannot act irresponsibly. We must remove the conflicts of interest, executive remuneration packages must reflect the values of hardworking families that you reward hard work and enterprise and effort and responsible risk-taking, but you do not reward excesses and irresponsibility.

BEARDSLEY: Despite the appearance of unity at the Brussels summit, there are still plenty of Euro skeptics, among them, Jean-Pierre Chevenement a former French Defense Minister. He says Europe's forces and international negotiator will dissipate as soon as someone less forceful than Zarkozy takes over the EU presidency in January.

Mr. JEAN-PIERRE CHEVENEMENT (Former French Defense Minister and Former French Interior Minister): (Through Translator) Europe doesn't exist. Europe is made up of nations. And, it's the three biggest European nations, France, Germany and Britain who crafted this plan and are trying to pass it off as European. Europe didn't act. Europe's three largest countries acted and dragged the others along.

BEARDSLEY: But Zarkozy insists that Europe speaks with one voice and wants to establish a new financial world order. For NPR News, I'm Eleanor Beardsley in Paris.

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