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Sarkozy Wants $25 Billion EU Crisis Fund

The French President will propose the increase in Brussels next week to member states. Eastern Europe in particular is in financial straits

French president Nicolas Sarkozy has called for an EU crisis fund for member states to be extended from €12 billion currently to "at least" €20 billion.

Mr Sarkozy—whose country currently holds the rotating EU presidency—will make the proposal to his EU counterparts when they meet in Brussels next Friday (7 November).

Currently, an EU "community mechanism" allows member states to receive medium-term loans from a common pot of €12 billion.

"I will propose on 7 November &that the EU itself, which has at its disposal €12 billion to support a certain number of member states, passes to at least €20 billion in order to increase our ability to respond to the [financial] crisis," the French president said on Tuesday (28 October) shortly before a meeting with UK prime minister Gordon Brown in Versailles, France.

Both men called for an increase in funding for the International Monetary Fund (IMF) as well.

"Nicolas and I will be talking about the global fund that the International Monetary Fund will have now to create to build on its own resources to help economies that are in difficulty to prevent contagion coming from their countries into our countries," Mr Brown said, according to the BBC.

Mr Sarkozy added: "We must find the ways and means to provide more funds for the IMF to support a certain number of countries—I am thinking particularly of the developing nations."

The UK premier also expressed concerns about the consequences of the financial crisis in eastern Europe in particular, where Hungary has been the EU member state facing the most difficulties in the last weeks.

"Our first priority at the moment is to stop the contagion to other countries, including in eastern Europe, where there are problems emerging and action must be taken," he was reported as saying by the Associated Press.

The two leaders were meeting to prepare a common stance ahead of the EU summit next week on the financial crisis and a global summit that will take place on 15 November in Washington, where the 27-nation bloc is aiming to speak with one voice.

The bilateral meeting came after Mr Sarkozy also held informal talks last week with German chancellor Angela Merkel last week—as well as with Chinese, Japanese and South Korean leaders, who will also be present at the 15 November summit.

On Thursday (30 October), Mr Brown will also talk with Ms Merkel—who has been opposed to some of Mr Sarkozy's most recent ideas on how to tackle the EU economy, judging them too protectionist.

For its part, the European Commission will later today present its own proposals "on the responses to support the economic activity in the European Union and on the preparations for the meetings at EU and at international level on the reform of the international financial system."

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