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Brussels, Belgium - France pushed its EU partners Tuesday to support boosting the powers of the International Monetary Fund to contain the turmoil that has swept financial markets worldwide and is slowing the European economy.
The gathering of all 27 EU finance ministers is meant to prepare the ground for a meeting of EU leaders on Friday and a wider summit of 20 industrial and developing powers on November 15-16 in Washington.
On Tuesday France pushed for support for stricter financial supervision and measures to stop reckless risk-taking in the banking industry.
France, which holds the EU presidency, wants the G-20 finance summit on November 15-16 to commit to regulation of multinational finance groups through more supervision of credit rating agencies and financial risk-taking.
German Finance Minister Peer Steinbrueck said he broadly agreed with the French suggestions but Britain was more cautious believing it is too soon to sign up to specific rules when global talks are just beginning.
"It is important Europe speaks with one voice" at the G-20 Washington summit, said Austrian Finance Minister Wilhelm Molterer.
The G-20 includes the G-7 industrialized democracies and emerging economic powers such as Brazil, India, Russia and China.
Lack of trust
"The time is coming that we can no longer trust self-regulation" by the financial sector, said Dutch Finance Minister Wouter Bos.
Tuesday's talks followed a meeting on Monday of the finance ministers of the 15-nation euro zone which agreed to spend their way out of the accelerating downturn while avoiding excessive deficit spending and indebtedness.
Luxembourg Prime Minister Jean-Claude Juncker, who led Monday's talks, said then that euro zone nations would drop an ambitious goal to eliminate annual budget deficits by 2010 as the financial crisis forces them to take on more debt.
The EU executive wants governments to avoid pumping subsidies into industry and stick to spending on programs supporting growth in the longer-term such as transport and energy networks and climate change.
On Monday, the European Commission forecast that the economy of the 15-nation euro-zone may already be in a recession and will expand by just 0.1% in 2009. Euro zone ministers did not argue with an EU economy outlook that says the currency area may already be in recession and predicts it will barely grow next year, Juncker said.
The euro zone's largest members - Germany, France and Italy - will come to a standstill or shrink next year, the EU executive forecast, warning of a deeper credit crunch that would brake the economy, strain government finances and put a near-freeze on household spending. Among nations that don't use the euro, Britain's economy will slip into recession.
- AP