Brown launches 'Bretton Woods Two'
Wednesday, 15 October 2008 5:54 PM
Gordon Brown is meeting EU leaders to establish a new system of global finance, dubbed 'Breton Woods Two' by observers.
With the markets responding relatively favourably to government stakeholding of banks, increased liquidity and guaranteed interbank lending, leaders have their eyes set on the next stage of economic recovery.
Over the last week EU states have spent over ?2 trillion (£1.5 trillion) to support their banking systems.
Gordon Brown highlighted the significance of the last few days, speaking before the summit.
"We have made decisions that matter for what will happen for next few years. We see economies taking action around the world," the prime minister said.
He added the first stage of the crisis has been passed - with stabilisation achieved - but the nations of Europe and the world have to step forward for stage two.
"Today is an important moment for the European union," he continued.
"I believe stage one has been the stabilisation of the financial system.
"Stage two is to make sure problem that developed in the financial system, problems we know started in America, do not happen again."
Mr Brown's calls for a new system of global regulation carries echoes of the original Bretton Woods system, implemented by world leaders after World War Two to establish financial relations.
He also called for international co-operation to route out excesses in the financial system and increase supervision - with early warning systems on problems and rebuilding of the IMF.
The prime minister warned of further losses in the coming weeks around the world.
European Commission president Jose Manuel Barroso said: "Now we need to take it to next level. An urgent priority is further co-operation on international level - especially with the US.
"I am happy to see a convergence of views."
The summit will also focus on negotiating climate change and energy packages, as well as the future of the Treaty of Lisbon and relations with eastern neighbours following the conflict between Russia and Georgia.
Mr Barroso also pushed for the environment not to fall off the agenda - saying it wasn't an aperitif.
Mr Brown said: "It is not time to abandon climate change - oil prices have increased massively.
"Climate change is part of the solution for many of the problems we see."
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