Meeting in Berlin, political heads from Europe's largest economies called for stricter market regulation to prevent a repetition of the current crisis
Leaders from the EU's largest economies have called for stricter regulation of the financial sector to prevent a repetition of the current crisis after meeting in Berlin on Sunday (22 February).
"All financial markets, products and participants—including hedge funds and other private pools of capital which may pose a systemic risk—must be subjected to appropriate oversight or regulation," a summit statement said.
Sunday's meeting was called by German chancellor Angela Merkel earlier this month to help the EU hammer out a unified position ahead of the G20 meeting on 2 April, which will be attended by Barak Obama on his first visit to Europe as president of the United States.
Leaders from France, Germany, the UK, Italy, the Netherlands and Spain all took part in the meeting, as well as Czech prime minister Mirek Topolanek, as Prague currently holds the EU presidency.
The conclusions from the meeting will feed into two EU summits of its 27 leaders in March and the G20 gathering of developed and developing nations in London.
The leaders agreed on the need to improve market transparency, setup regulation on hedge funds, crack down on tax havens and to compel banks to save more capital.
"We can't afford failure in London," French President Nicholas Sarkozy told reporters in Berlin after the talks. "We have to succeed and we can't accept that anyone or anything will get in the way of this [G20] summit."
The leaders also called for the International Monetary Fund's resources to be doubled to $500 billion.
"We decided that the international institutions have got to play a bigger role in working with individual countries," UK prime minister Gordon Brown said.
"We decided that the international institutions should have at least $500bn, to enable them not just to deal with crises but to enable them to be able to prevent crises,"
The appearance of a unified position on greater regulation for financial institutions such as hedge funds can be seen as a victory for Berlin and Paris who were concerned that London was backing away from the idea.
"It's not a case of talking up the situation but we want to send the message that we have a real opportunity to come out strengthened from this crisis," Ms Merkel said regarding the need for a new financial framework.
But Mr. Topolanek painted a different picture to that of the unified front displayed by the EU leaders at a press conference after the meeting.
"If I put it very tenderly, the divergence in opinions was rather big," Topolanek told AFP on a plane home.
"It was obvious that the four countries representing the EU in the G20 (France, Germany, Britain, Italy) do not have the same opinion on a number of issues," he added.
"Our responsibility [as holders of the presidency] is to look for some unity. This won't be easy at all."
Mr. Topolanek will represent the European Union at the G20 on 2 April in London where preparations are already under way for the meeting.
Superintendent David Hartshorn, who heads the London Metropolitan police's public order branch, told the Guardian newspaper that he had major concerns over the upcoming meeting.
"We've got G20 coming and I think that is being advertised on some of the sites as the highlight of what they see as a 'summer of rage'," he said, referring to websites encouraging activists to come and demonstrate.