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European leaders propose new financial market rules

February 23, 2009|Associated Press

European leaders mounted a united front against the global financial crisis Sunday, proposing sweeping new market regulations, but it remained unclear whether economic giants such as the United States and China would go along.

Heads of government and finance ministers from Europe's largest economies joined German Chancellor Angela Merkel in Berlin to lay the groundwork for a common European position on economic reforms before an April 2 summit of the Group of 20 nations in London.

"Europe will own up to its responsibility in the world," Merkel told reporters.

Leaders from Britain, France, Germany, Italy, Luxembourg, Spain, the Netherlands and the Czech Republic agreed to press for sanctions on tax havens, caps for managers' bonus payments and a stronger role and increased funding for the International Monetary Fund.

Although the plans were based on an agenda adopted by the G-20 in November, the measures announced Sunday were more far-reaching and concrete, particularly on long-disputed issues such as hedge fund regulation.

However, analysts say other G-20 members, including the U.S., China, Japan and India, might not share Europe's zeal for blanket global regulations.

During Germany's turn at the presidency of the Group of 8 two years ago, Merkel pushed hard for more transparency on global financial markets, but her efforts ran into stiff resistance from Washington and London.

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