Asia, EU leaders moot global reforms

Antoaneta Bezlova

A two-day meeting of European and Asian leaders in Beijing has produced a joint statement pledging a coordinated response to the global financial crisis, but concrete action is seen dependant on the entry of Asia’s emerging economies into global policy-setting institutions. The leaders emerged from the ASEM meeting on Saturday, calling for an “effective and comprehensive reform of the international monetary and financial systems” through consultations with “all stakeholders and the relevant international financial institutions”.

While little specifics were offered on what would replace the Bretton Woods system, that has governed international finance since the end of World War II, European politicians appraised the meeting as a success in drawing the support of Asian countries for reshaping the global economic structure.

“The fact that so quickly all Asian leaders agreed on the principles that we brought to this meeting is a good demonstration of the possibility of reaching a consensus,” European Commission President Jose Manuel Barroso told the media. French President Nicholas Sarkozy

— the architect of the plan to overhaul international capitalism and infuse the financial system with more regulation and better risk management — called the meeting very “helpful” for Asia and Europe to tackle the global financial crisis and build up common cause. “We had discussed nearly all of the topics concerned by the two continents, including the most difficult issues,” he said at a press conference. Sarkozy is looking to present his plan at the international conference on the financial crisis in Washington on Nov.15.

China said it would attend the meeting, but reiterated its stance that keeping the country’s fast growing economy stable is its biggest contribution to combating the financial crisis. Noting that the effect of global financial meltdown on Chinese banks has been limited, Premier Wen Jiabao said that all countries, and developed countries in particular, should take “measures to stabilise the markets and restore public confidence”. More than 40 leaders from Europe and Asia took part in the weekend discussions in Beijing that focused on the financial crisis. Asian powers discussed the launching of a regional monetary crisis fund to help countries in the continent cope better with global financial turmoil. On Friday, members of the Association of South East Asian Nations (ASEAN) together with China, Japan and South Korea agreed to an 80 billion US dollar fund of central bank swap lines, intended to provide emergency liquidity to financially troubled nations.

But as talks in Beijing proceeded, South Korea appeared battered by the financial storm and doubts arose over its commitment to the fund. After stock markets and the currency plunged on Friday, the Central Bank of South Korea announced it would hold an emergency monetary policy meeting on Monday. Meanwhile, Philippine president Gloria Macapagal-Arroyo called on China to take the lead in convincing other rich nations to give more to the fund. “China has a tradition of or a track record for being very responsible member of the global economic order,” she was quoted as saying. “While it is premature to say what China should do we are confident China will continue to be a responsible member of the neighbourhood.”