BRUSSELS, Belgium - Efforts to ease the global financial crisis top the agenda at a European Union summit opening Wednesday along with talks to prevent the economic turmoil from derailing the EU's ambitious plans to fight climate change.
French President Nicolas Sarkozy, who is chairing the talks, is trying to get all 27 leaders to back a plan to shore up the banking sector agreed to Sunday by Britain and the 15 countries that use the euro. Under the plan's broad principles, individual countries put up a total of euro1.7 trillion (US$2.3 trillion) in guarantees and emergency aid to help banks.
The joint action, along with broadly similar U.S. plans that include taking stakes in big banks, helped stop severe declines in world stock markets. But credit markets remain in distress with fearful banks willing to lend to each other only at abnormally high rates, and that makes credit harder to get for businesses and consumers.
British Prime Minister Gordon Brown appealed to the other countries to join in the plan, which he said was key for Europe and the world to unfreeze bank lending and soften any economic downturn stemming from the difficulties banks are having.
"I hope we will find agreement ... to stabilize the financial system and then to move the economy of Europe forward," said Brown ahead of the summit.
"We now see around the world major economies taking similar action, liquidity being brought into the system, we have the recapitalization of the banks, so that they are stronger for the future, we have the resumption of the funding the banks can do to small businesses and mortgage holders," Brown told reporters.
The summit will also look at whether the EU should restart partnership talks with Russia that were frozen last month to protest Russia's invasion of Georgia.
Meeting with Brown, European Commission President Jose Manuel Barroso appealed to EU leaders to adopt "unprecedented European Union action" to calm markets and prevent a deep recession across the continent.
Leaders of EU nations outside the euro-zone -- such as Sweden, Denmark and Poland -- are being asked to endorse a wide banking rescue package. The plan leaves individual nations flexibility to chose from a range of measures such as buying shares in banks and guaranteeing savings and interbank loans.
The European moves are modelled on Britain's euro64 billion (US$88 billion) plan to partly nationalize major banks. Brown has also promised to guarantee billions of euros (dollars) of interbank loans to restore confidence in the financial sector.
Barroso also wants the two-day summit to agree on giving the EU institutions more power to coordinate financial supervision over the banking sector that he claims would prevent future problems. Some nations are reluctant to allow other countries have any say over their banks.
Brown said it was key also that EU nations come together to support an overhaul of global supervision of financial institutions.
"We now have global financial markets, but what we do not have is anything other than national and regional regulation and supervision, so if we are going to sort out global financial problems ... we need better ways of doing this," Brown said.
The Czech Republic and some other eastern EU countries are complaining about the plan however, arguing they cannot afford to offer the same level of guarantees to account holders as richer EU members. Other countries that don't use the euro such as Sweden and Denmark were angered they were shutout of the earlier euro-zone plan.
"There are two events that showed that the EU is weak, Russia's invasion of Georgia and the financial crisis," said Denmark's Prime Minister Anders Fogh Rasmussen. "We could very well have wished to have better instruments."
Barroso said the EU should not use the financial crisis as an excuse to drop ambitious goals to cut carbon dioxide emissions by a fifth by 2020.
"It is critically important to keep to the (climate change package). It is the best way to defend European industry, European growth and European jobs," Barroso said.
He said EU nations should not attempt to water down a year-old deal to cut emissions which he said would damage the 27-nation bloc's international credibility and could jeopardize UN talks on climate change.
