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EU clashes with US over global capitalism - By Bruno Waterfield - www.telegraph.co.uk
European heads of state are to demand leadership from the United States at a series of summits designed to reform the global financial system.
World leaders will meet in the United Sates next month to find a fix for the international financial crisis after President George W. Bush bowed to European calls for a global economic summit.
Mr Bush bowed to demands from French President Nicolas Sarkozy, current holder of the EU's rotating presidency and José Manuel Barroso, President of the European Commission, at his Camp David presidential retreat.
The emboldened Europeans signaled that the bloc was ready to ambush Mr Bush and his successor, who is expected to attend the meeting, to impose a European vision for new financial market regulation.
"The EU must take over the leadership of change because that is what it has long been calling for while the US was not favorable," said José Luis Rodriguez Zapatero, the Spanish Prime Minister. "There has to be regulation and limits to everything to do with incentives and rewards."
The French leader reiterated his attacks on the American-led system of capitalism."We cannot continue along the same lines because the same problems will trigger the same disasters," said Mr Sarkozy. "This is no longer acceptable. This is no longer possible. This sort of capitalism is a betrayal of the sort of capitalism we believe in."
The summit, expected to take place just days or weeks after US presidential elections in November, will start a political tussle over The US President has backed the steps European nations have taken in recent weeks to stabilize financial markets but has signaled American uneasiness with some EU calls for a root and branch overhaul of capitalism.
But remarks after the Camp David meeting has already exposed deep trans-Atlanic differences. "We will work to strengthen and modernize our nations' financial systems so we can help ensure that this crisis doesn't happen again," said Mr Bush.
"As we make the regulatory and institutional changes necessary to avoid a repeat of this crisis, it is essential that we preserve the foundations of democratic capitalism a commitment to free markets, free enterprise, and free trade," he said. "We must resist the dangerous temptation of economic isolationism and continue the policies of open markets that have lifted standards of living and helped millions of people escape poverty around the world."
In contrast, President Sarkozy and other EU leaders have floated radical ideas of reforming rating agencies, the creation of new international financial supervisors and tough regulation of hedge funds and tax havens.
Even the venue of the global economic conference could be a source of discord after President Sarkozy called for it to be held under the auspices of the United Nations in New York, near America's Wall Street financial district, the source, the EU claims, of the present economic crisis.
"Insofar as the crisis began in New York, then the global solution must be found to this crisis in New York," Mr Sarkozy said.
A weakened President Bush, who will be seeing out his last months in office after US presidential elections on Nov 4. The US leader is expected to try and wrest back control by holding the summit in Washington.
European diplomats are hoping that a new US President-elect might be more receptive to European style "social market" reforms, especially if the elections sweep Democrat candidate Barack Obama into power.
As Mr Bush nears the end of his second term and prepares to hand over the White House in January next year, any future American financial reforms will fall to his successor.
European heads of state are to demand leadership from the United States at a series of summits designed to reform the global financial system.
World leaders will meet in the United Sates next month to find a fix for the international financial crisis after President George W. Bush bowed to European calls for a global economic summit.
Mr Bush bowed to demands from French President Nicolas Sarkozy, current holder of the EU's rotating presidency and José Manuel Barroso, President of the European Commission, at his Camp David presidential retreat.
The emboldened Europeans signaled that the bloc was ready to ambush Mr Bush and his successor, who is expected to attend the meeting, to impose a European vision for new financial market regulation.
"The EU must take over the leadership of change because that is what it has long been calling for while the US was not favorable," said José Luis Rodriguez Zapatero, the Spanish Prime Minister. "There has to be regulation and limits to everything to do with incentives and rewards."
The French leader reiterated his attacks on the American-led system of capitalism."We cannot continue along the same lines because the same problems will trigger the same disasters," said Mr Sarkozy. "This is no longer acceptable. This is no longer possible. This sort of capitalism is a betrayal of the sort of capitalism we believe in."
The summit, expected to take place just days or weeks after US presidential elections in November, will start a political tussle over The US President has backed the steps European nations have taken in recent weeks to stabilize financial markets but has signaled American uneasiness with some EU calls for a root and branch overhaul of capitalism.
But remarks after the Camp David meeting has already exposed deep trans-Atlanic differences. "We will work to strengthen and modernize our nations' financial systems so we can help ensure that this crisis doesn't happen again," said Mr Bush.
"As we make the regulatory and institutional changes necessary to avoid a repeat of this crisis, it is essential that we preserve the foundations of democratic capitalism a commitment to free markets, free enterprise, and free trade," he said. "We must resist the dangerous temptation of economic isolationism and continue the policies of open markets that have lifted standards of living and helped millions of people escape poverty around the world."
In contrast, President Sarkozy and other EU leaders have floated radical ideas of reforming rating agencies, the creation of new international financial supervisors and tough regulation of hedge funds and tax havens.
Even the venue of the global economic conference could be a source of discord after President Sarkozy called for it to be held under the auspices of the United Nations in New York, near America's Wall Street financial district, the source, the EU claims, of the present economic crisis.
"Insofar as the crisis began in New York, then the global solution must be found to this crisis in New York," Mr Sarkozy said.
A weakened President Bush, who will be seeing out his last months in office after US presidential elections on Nov 4. The US leader is expected to try and wrest back control by holding the summit in Washington.
European diplomats are hoping that a new US President-elect might be more receptive to European style "social market" reforms, especially if the elections sweep Democrat candidate Barack Obama into power.
As Mr Bush nears the end of his second term and prepares to hand over the White House in January next year, any future American financial reforms will fall to his successor.