Russia, EU agree on finance reform ahead of Washington summit

Medvedev and Sarkozy, whose country holds the rotating presidency of the European Union, met in Nice for four hours before setting off for a meeting in Washington with the heads of the world’s most important economies.  Â

 

"I think I can say that Russia’s propositions were of great quality and that they are very close to Europe’s propositions," Sarkozy said at a joint news conference held after the talks.

 

"I’m pleased to see the Russian Federations determination that some strong decisions be made at the Washington summit," he added.

 

Medvedev agreed, saying that Moscow and Brussels were heading to Washington with "practically common positions". He also backed Sarkozy’s call for a second summit in February once U.S. president-elect Obama takes office.

 

The leaders also discussed the crisis in Georgia, and Sarkozy called on Medvedev to withdraw Russian forces from two enclaves they are occupying on the outskirts of South Ossetia in spite of a ceasefire deal.

 

But both said that disputes in other domains should not deflect them from reforming international finance and the need, in Medvedev’s works "to neutralize the damaging effects of the global crisis".

 

Neither went into details of their proposals ahead of Saturday’s meeting in Washington, but in the build-up to the Nice talks both had spoken of the need to better regulate the free market.Â

 

The French president has said the Washington meeting should seek to lay the groundwork for a complete overhaul of the financial system, an idea Russia was pushing even before the credit crisis erupted.

 

Europe now hopes that Russia’s support will help push the United States into major changes -- a move that is likely to meet stiff resistance in Washington.

 

"The crisis was not a failure of the free market system. And the answer is not to try to reinvent that system," U.S. President George W. Bush said in a speech laying out his agenda for the Washington summit.

 

While it seemed unlikely that Europe and Russia would arrive in Washington with a joint blueprint, the two sides were moving closer together.

 

Medvedev and Sarkozy have blamed U.S. economic management for a credit crunch that has brought down banks around the world, put the squeeze on businesses and consumers and pushed national economies into recession.

 

Sarkozy has called for the summit of more than 20 of the worlds leading economies and emerging powers, to "remake the world financial system", creating a so-called Bretton Woods II.

 

An international conference at Bretton Woods, New Hampshire, in 1944 to shape the post-World War II financial system resulted in the creation of the World Bank and the International Monetary Fund.

 

Moscow has lobbied for change in the running of these bodies and, in particular, for more weight to be given to representatives of the so-called "BRIC" emerging nations, Brazil, Russia, India and China.

 

Following the talks at the Sarde Palace in Nice’s historic old quarter, the French and Russian leaders held a working lunch before heading to the airport to fly separately to Washington.

 

Photo: AFP