Europe Wants Fast Action From World Finance Summit

Shares in Asia, Europe and the United States tumbled again on Thursday on growing fears of a recession.

Next week's global finance summit in Washington must launch rapid reforms to prevent a fresh outbreak of the credit crisis that has rocked the world economy, European Union leaders will say on Friday.

France, which is chairing a meeting in Brussels, proposes the EU demand a 100-day deadline for action such as entrusting the International Monetary Fund with pre-empting or allaying future crises.

Paris has broad backing from the other members of the 27-member bloc for its proposals, but was moved to rare open criticism of Germany hours before the Brussels talks for Berlin's resistance to tighter coordination of economic policy.

Germany and Britain insist the Nov. 15 meeting of Group of Eight (G8) economies and emerging countries, which may also include U.S. President-elect Barack Obama's team, must open the way for fundamental change. U.S. President George W. Bush's outgoing administration has taken a more cautious stance.

"We want Washington to be more than just a nice meeting where everyone gets a chance to see Obama," a German official said.

"We expect Washington to produce a clear time schedule, a clear mandate...We know that the readiness to overhaul the international financial architecture will diminish as countries begin to feel better."

However, in a sign of lingering national differences, a top French official criticised Germany for having vetoed earlier this week a French call for an internationally coordinated response to economic challenges.

"I think public opinion around Europe expects coordination and unity ... National and disorderly attitudes are not a good solution," European affairs minister Jean-Pierre Jouyet told French radio.

Germany did not want a reference to anything that could be interpreted as a permanent European economic government called for by President Nicolas Sarkozy, seeing it as a possible threat to the independence of the European Central Bank.

British Prime Minister Gordon Brown, who like Sarkozy has urged an overhaul of the world financial bodies established after World War Two, called for governments around the world to follow rate cuts with measures to bolster the economy.

"Coordinated action on interest rates should be complemented by action on fiscal policy," Brown told reporters before going to Brussels, calling on British banks to pass on the Bank of England's latest rate cut.

Most Asian stocks fell again on Friday after shares across the world tumbled on Thursday on growing fears of a recession.

The IMF forecast an economic contraction of a size not seen since World War Two, and interest rate cuts in Europe failed to reassure markets amid an onslaught of bad company news, including Japanese automaker Toyota halving its profit forecast.

BOILED-DOWN AGENDA

Yet EU leaders will go to Washington buoyed by the belief that it was their 2.2 trillion euro ($2.8 trillion) round of bank rescues last month that helped avert a financial meltdown sparked by a credit crunch coming from the United States.

They are set to boil down their reform agenda to five key points after an earlier shopping list drawn up by France was deemed too extensive as a negotiating base.

According to an EU paper obtained by Reuters, they are:

-- to entrust the IMF with "primary responsibility" for recommending measures to restore economic confidence and for rescuing countries in trouble

-- to submit credit rating agencies, criticised by some analysts for their failure to highlight the growing risk of a credit crunch, to tighter surveillance

-- to harmonise accounting standards around the world and review the use of the "fair value" rule, which requires institutions to value their assets at market value, even when the market for a given security is malfunctioning

-- to "take steps to ensure that no market segment, territory, or financial institution, including hedge funds, is beyond regulation or surveillance"

-- to implement codes of conduct to avoid excessive risk in the financial industry, including scrutinising executive pay.

"The summit should ... formulate a precise work programme to allow the presentation within 100 days of concrete and operational proposals on those subjects identified as priorities," said the discussion paper, written by France.