GEO World

Asia, Europe reach consensus on financial crisis

Updated at: 0024 PST, Sunday, October 26, 2008 BEIJING: Asian and European leaders said Saturday they have reached a broad consensus on ways to deal with the global financial meltdown and will present their views at a crisis summit next month in Washington. Speaking at the close of a two-day Asia-Europe Meeting in China's capital, the leaders called for new rules for guiding the global economy and a leading role for the International Monetary Fund in aiding crisis-stricken countries. The biennial forum, known as ASEM, generally does not make decisions, and a statement issued by the leaders indicated how much the crisis in global markets has driven world opinion and institutions. “I'm pleased to confirm a shared determination and commitment of Europe and Asia to work together,'' EU Commission President Jose Barroso said at a closing news conference. He said participants would use the statement as the basis of their approach at the Nov. 15 Washington summit of the 20 largest economies. Although short on details, the statement, adopted Friday, calls on the IMF and similar institutions to help stabilize struggling banks and shore up flagging share prices. “Leaders agreed that the IMF should play a critical role in assisting countries seriously affected by the crisis, upon their request,'' it said. Participants also agreed to “undertake effective and comprehensive reform of the international monetary and financial systems,'' the statement said. The document is one of the strongest endorsements yet for a leading role in the crisis for the Washington-based IMF, long known as the international lender of last resort. Responses to the crisis among participants have been varied thus far. The 15 euro countries and Britain reacted in dramatic fashion, agreeing to put up a total of US$2.3 trillion in guarantees and emergency aid to help banks. In contrast, South Korea, China, Japan and the 10-country Association of Southeast Asian Nations have merely recommitted themselves to an US$80 billion emergency fund to help those facing liquidity problems to be established by next June even while their stock markets tumble and export markets dry up. Speaking for the hosts, Chinese Premier Wen Jiabao said financial innovation needed to be balanced with regulation, and called for measures to reduce the impact of the meltdown on jobs, growth and trade.