EU commission chief pleads for 'fundamental' review of financial system

Commission president José Manuel Barroso says this weekend’s G20 summit in Washington offers a “unique” opportunity for a “deep-seated” reform of the banking sector.

The Portuguese official told this website that he hoped the meeting of the Group of 20 industrialised and emerging economies would launch a “fundamental” review of the global financial system.

Barroso said: “It is a very important that there is a revision, not just of the banking sector but of other related issues such as what I call global prosperity, that is, efforts to promote prosperity everywhere.”

He was speaking on Thursday after giving a keynote speech at a meeting of the European Network of Political Foundations (ENOP) in Brussels.

He told the meeting he welcomed the “real commitment” of the incoming Obama presidency in the US to tackle not just climate change but to “engage more in a multilateral world.”

He also said Europe should be “proud” of the contributions it has already made in these areas, as well as taking a lead in addressing the financial crisis.

Meanwhile, in response to the official recognition of recession in the EU today, Socialist MEPs have set out a five-point plan to rebuild the world financial system and boost the economy.

Socialist group leader Martin Schulz said the Washington meeting should be a successor to Bretton Woods, the 1944 conference in New Hampshire which established international monetary protocols governing trade, banking and other financial relations among nations.

 The German deputy said, “”We support the call for a new Bretton Woods to create a new, more accountable, more stable and fairer system of global financial governance.
 
“We face the deepest economic crisis in 80 years with dramatic job losses.  In addition, more than 150 million jobs may disappear next year throughout the developing world, as a result of the rich world’s credit crunch.

"Governments have saved the banks with public money but it is now pay-back time.”

French Socialist MEP Pervenche Berès, chair of the economic and monetary affairs committee, said, “Only strong, coordinated government action both at European and international level can restore confidence, secure and create more jobs, fill order books, and boost demand from both business and consumers. The more coordinated such actions are, the more effective they will be."

 “The EU has a key role to play in raising and channelling funds. There should be no taboo. The member states should discuss the possibility for the EU to issue Eurobonds to invest in European projects.”

 

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