BRUSSELS - EU leaders struggled on Friday to hammer out a common plan for overhauling the global financial system as French-German frictions also flared over whether Europe needs a joint economic recovery plan.
While most European leaders agree that a sweeping revision of the rules of global finance is needed to prevent future crises, Sweden for one criticised the proposals as going too far.
European Union solidarity also proved to be fragile over the prickly question of just how far EU nations should coordinate their efforts to drag Europe out of recession.
The 27-nation bloc, under its current French presidency, has led calls for a broad overhaul of the global financial architecture, prescribing a stiff dose of tougher regulation to fix the system's ills.
France wants that to be Europe's main message at a summit in Washington on November 15 which will bring the 20 top global economic powers together to discuss reforming the international financial order.
'We want a programme, based on the lessons drawn from the crisis, that will prevent that such crises are repeated. Europe will bring its proposals,' said German Chancellor Angela Merkel as she arrived.
However, Swedish Prime Minister Fredrik Reinfeldt said Stockholm for one had 'a number of objections' to a series of proposals France wants to be Europe's contribution to the Washington summit, arguing in particular that 'there is too much regulation'.
'It is very easy to be in such a rush to show leadership that one forgets to correctly and thoroughly analyse' the situation, Mr Reinfeldt said as he arrived. 'These are very complex questions regarding how to globally work with different kinds of regulation.'
Among the proposals put to its EU partners, France calls for action to ensure that no financial institution, market or jurisdiction falls outside of regulators' reach.
In a document the leaders were to discuss, Paris also recommends regulatory oversight of credit rating agencies, convergence between international accounting standards and limits on bankers' bonuses so that they do not have an incentive to take excessive risk.
France also wants a much more important role for the International Monetary Fund which it says should be 'the prime organisation responsible for world financial stability'.
Eager for the Washington summit to be more than just a talking shop, the EU's French presidency also wants it to be followed up with concrete proposals in the ensuing 100 days.
While not officially on the agenda, EU leaders were also dogged by divisions over the need for coordinated European measures to revive their flagging economies, with Germany pressing ahead with its own plans to jolt Europe's biggest economy out of recession.
While acknowledging that it was a 'controversial' subject, French President Nicolas Sarkozy insisted on a European approach, saying: 'Let that coordination take whatever form you like, but let's have the coordination.
'I maintain that in the face of the economic crisis, the coordination of economic policies is a strong obligation,' Mr Sarkozy said in a speech ahead of the meeting.
'There is no other choice than to understand and listen and try together to preserve economic growth,' he said.
Mr Sarkozy also hinted that France could hand Spain one of its two seats at the Washington summit representing the EU at the meeting after Madrid lobbied hard to be present. -- AFP
