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Europe

EU Struggles to Present Common Front at Financial Summit

The European Union will strive to present a united front at the financial summit in Washington though there are differences among EU leaders about what needs to be done to tackle the crisis.

From left to right, Luxembourg's Prime Minister Jean Claude Juncker, Italian Prime Minister Silvio Berlusconi, German Chancellor Angela Merkel, French President Nicolas Sarkozy, British Prime Minister Gordon Brown, European Commission President Jose Manuel Barroso and European Central Bank President Jean Claude Trichet at an emergency financial summit in Paris, Oct. 4, 2008

Things aren't alway harmonious among EU leaders as this photo may have you believe

How unified will the EU appear at the World Finance Summit. And what does unity mean? It is clear that the EU is not a federal state with unified state politics, but rather a group of countries.

"Everyone agrees that it's absolutely necessary that we coordinate with each other on economic policies in Europe," said French president and the current EU president Nicolas Sarkozy following the EU summit of the past week. "Agreement does not mean that everyone does the same, but rather that everyone has to move in the same direction." This is apparently what the 27 nations want.

A meeting of the International Monetary and Financial Committee of the Board of Governors

If it were up to the EU, the International Monetary Fund would gain more power

But that concerns cooperation within the EU. Now it is time to deal with the demands of other world players.

What is clear is that the heads of states and governments want financial institutes, markets and even rating agencies all over the world to be regulated or at least monitored.

The International Monetary Fund should play an increased role, including an early warning system for future financial crises. Managers should no longer be given incentives to focus on short-term gain at the expense of long-term development. In general, risks should be lowered. In addition, world leaders plan a follow-up conference 100 days after the summit to take stock of progress.

Rules only for EU countries?

Dissent exists within the EU about the scale of government regulation and the question of how political it looks. Sarkozy's talk about a European economic government is seen by many as bordering on socialism and excluding non-European nations.

For German Chancellor Angela Merkel, that is just quibbling. "You can say that economic cooperation between government leaders is a council that focuses on economic issues, you can even call it an economic government if you like," Merkel said. "But the point is that it encompasses 27 member countries and there was no discussion about that."

German Finance Minister Peer Steinbrueck is seen during his speech at the German Federal Parliament in Berlin, Germany, Wednesday, Oct. 15, 2008

Sarkozy isn’t always in agreement with him: Finance Minister Peer Steinbrück

For all that show of unity, Sarkozy did not hide his personal dislike of Germany's Finance Minister Peer Steinbrueck. According to Sarkozy, Steinbrueck is sometimes disagreeable. But the bilateral friendship has to rise above such pettiness and in Washington such small childish behavior will hopefully be quelled.

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