February 22, 2009 / 2:55 PM / 10 years ago

European summit to prepare G20 finance reforms

(Reuters) - European leaders met in Berlin on Sunday to try and forge a common position on how to proceed with reform of the global financial system ahead of a summit of the Group of 20 industrial powers in April.

Following are highlights from the closing news conference.

GERMAN CHANCELLOR ANGELA MERKEL

“We’re dealing with an extraordinary international crisis the likes of which we have not seen for decades, both as regards financial markets and the global economy. We believe that such an international crisis can only be solved jointly.”

“We have assembled...with the goal of restoring confidence in the markets, which has not yet happened. Berlin is a staging post between Washington and the Apr. 2 summit in London where we will take forward the European position. Everyone feels quite clearly the need to ensure that London is a success.

“We are making a commitment that all financial markets, products, and participants — including hedge funds and rating agencies — are of course subject to supervision and regulation. The necessary details on this must be worked out and be a part of the Action plan. We will draw up a list clearly showing which the uncooperative jurisdictions are.”

“If I compare it with the Washington action plan, we’ve made our position much clearer on the pursuit of tax havens, and also as far as the institutions, products and the specific locations go.”

“One of the mistakes of the past was that banks did not build up a buffer of their own capital and have not been able to react to the crisis.”

On auto industry aid.

“On the car industry issue, we will talk about this again next week. What we also have to talk about is the area of competition — that it’s equal not just within Europe but also with regards to the United States.”

BRITISH PRIME MINISTER GORDON BROWN

“These are testing times. We have seen the biggest global fiscal stimulus that has ever been done. We have seen the biggest cut in interest rates that the world has ever had. We are now seeing the biggest injection of funds into our banking system to ensure that banks can lend again to businesses. But today we decided that we need to do even more than that.

“We need a global new deal we need a grand bargain between the countries and continents of this world so that the world economy can no only recover but, as Angela Merkel has said, the economic system of the future can be based on the soundest and best principles of all.”

FRENCH PRESIDENT NICOLAS SARKOZY

“We all want London to be a success. We all realise that it’s the ultimate chance. We cannot allow there to be failure in London.

“We need sanctions to be at the heart of the new rules.

“On hedge funds we want greater regulation. And we all agreed that we can no longer tolerate the reward package system for traders and bankers.”

SPANISH PRIME MINISTER JOSE LUIS RODRIGUEZ ZAPATERO

“We are certain...that despite serious difficulties, we will together be successful. We will get out of this crisis and end up with new financial system which is sound, transparent and ethical.

“We support the sustainable economy charter which Chancellor Merkel has proposed. We were united in Berlin and we will remain united to face down this crisis in the EU. We are determined that this London summit will be one of decisions and action. Washington was one of meetings and planning. London has to be a summit where decisions are taken. We need global supervision and regulation — regulation that provides far more guarantees and security for all.

“We have to be very careful not to resort to any protectionism, protectionism is an economic mirage.

ITALIAN PRIME MINISTER SILVIO BERLUSCONI

“We shouldn’t yield to the temptation of protectionism. We are totally in agreement that we have to coordinate our response. We have to ensure that what we decide upon is (also done) by other countries such as China and other big economies — the biggest economy being the United States.”

“We didn’t talk about euro bonds because we decided to leave that issue to finance ministers.”

EUROGROUP CHAIRMAN JEAN-CLAUDE JUNCKER

“The financial crisis is not over yet and the economic crisis is getting worse. So European action is required. We can only be effective if we coordinate action more among ourselves. The economic packages launched should be tested for their final effects before deciding new measures.

“We need an exit strategy from deficits and debts. It is good that we talked about the global imbalances. When this crisis is over, the global imbalances will have become bigger.”

“I don’t see the risk of a payment default by a member of the euro zone. In any case, the member states that could present this risk should know that they are first and foremost responsible for delivering a budgetary and economic response so that this question does not arise.”

EUROPEAN COMMISSION PRESIDENT JOSE MANUEL BARROSO

“It’s fair to say that so far, the euro has been a very important factor of stability. It’s fair to say that the euro area so far has been reacting well (to the crisis).”

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