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EU vows to shield economy from financial fallout
(Agencies)
Updated: 2008-10-16 22:59
Italy's Foreign Minister Franco Frattini (L) and Prime Minister Silvio Berlusconi hold a news conference at the end of a European Union leaders summit in Brussels October 16, 2008. [Agencies] 

"Of course we see that the economic crisis is there, and the question I asked was: if we can bring coordinated answers to the financial crisis, can we not bring a coordinated answer to the economic crisis?" Sarkozy said, pledging that current EU president France would take initiatives on the matter.

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British Prime Minister Gordon Brown said market uncertainty would continue until action to rescue banks and stabilise the financial system had been finalised around the world.

"Outside the financial sector, the European Council (summit) underlines its determination to take the necessary steps to support growth and jobs," the final summit statement said.

"It calls on the the European Commission to make appropriate proposals before the end of the year notably to preserve the competitiveness of European industry."

Sarkozy said he had asked the EU executive to look into whether the European auto sector needed help, given it was being asked to build greener cars at a time when the United States was supplying cheap loans to its big three car makers.

No stimulus programme

The chairman of euro group finance ministers, Luxembourg Prime Minister Jean-Claude Juncker, said there was no question of any pan-European economic support programme or fiscal stimulus, which would breach EU budget rules. Diplomats said Britain insisted on removing references to the need to react to a slowdown in demand and the contraction in investment.

Leaders expressed solidarity with Iceland, particularly hard hit by a financial meltdown that threatens thousands of European savers, and urged support from the international community.

The statement called for the first time for a coordinated system of financial supervision at EU level and the creation of a crisis cell to help manage the financial turmoil.

As a first step, German Chancellor Angela Merkel told reporters, national central bank governors will meet at least once a month to exchange information on financial supervision.