France`s Sarkozy Calls For More EU Crisis Funding

Sarkozy was speaking ahead of a meeting with British Prime Minister Gordon Brown on the global financial crisis.

French President Nicolas Sarkozy said on Tuesday he would propose that the European Union expand a crisis funding facility available to member states to at least 20 billion euros ($25.02 billion) from 12 billion.

EU officials said Sarkozy was referring to a facility under EU law that currently allows members still outside the euro zone to receive medium-term loans up to a total of 12 billion euros.

Sarkozy was speaking ahead of a meeting with British Prime Minister Gordon Brown on the global financial crisis. Both men said more help was needed for emerging countries, and Brown said problems had begun to emerge in eastern Europe.

"I will propose on Nov. 7 that the European Union itself, which has 12 billion (euros) available to support a certain number of liquidities and to support a certain number of states, should go up to at least 20 billion to increase our capacity to respond to the crisis," Sarkozy said.

Sarkozy's meeting with Brown was aimed at seeking a common stance before a summit of world leaders on Nov. 15 on reforming the global financial system in response to the credit crunch.

EU leaders will meet on Nov. 7 to prepare for the summit.

"Our first priority at the moment is to stop the contagion to other countries including in eastern Europe where there are problems emerging and other action has to be taken," Brown said.

"This is a defining moment for how countries can work together," he added.

The medium-term EU loans available are for countries which are "experiencing or are seriously threatened with difficulties in their balance of current payments or capital movements", according to an EU regulation.

The regulation says a loan is disbursed in instalments, which come if the country meets mutually agreed conditions aimed at restoring financial stability.

Hungary, which joined the EU in 2004 but still has a long way to go before adopting the euro, has agreed with the International Monetary Fund on a financial aid package to help stabilise its battered currency and banking sector.

Hungary has been hit hard by the global financial crisis because it has one of the most fragile economies in Europe due to high budget and current account deficits and heavy reliance on external financing.

The World Bank has also urged Bulgaria to prepare an emergency plan in case its economy suffers a severe blow from the global financial crisis.