24/09/2008 - 06:51

World leaders to tackle financial woes

24/09/2008 - 06:51

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World leaders have called for urgent steps to tackle the global financial crisis saying the time had come for sweeping reforms of multilateral institutions, including the UN Security Council.

World leaders to tackle financial woes

World leaders have called for urgent steps to tackle the global financial crisis saying the time had come for sweeping reforms of multilateral institutions, including the UN Security Council.

The world's financial meltdown took centre stage at the United Nations yesterday as the UN General Assembly kicked off its annual debate, with UN chief Ban Ki-moon stressing the need to "restore order to the international financial markets".

US President George Bush, making his farewell speech to the 192-member assembly, assured worried world leaders that his administration and the US Congress would approve an emergency $US700 billion ($A830.47 billion) Wall Street bailout "in the urgent timeframe required".

In his remarks, French President Nicolas Sarkozy said world leaders most directly concerned by the issue had a duty "to meet before the end of the year to examine together the lessons of the most serious financial crisis the world has experienced since that of the 1930s".

He later told a press conference that he had in mind a "G8 format", referring to the eight leading economic powers that could be opened to "emerging countries".

"Let us rebuild together a regulated capitalism in which whole swathes of financial activity are not left to the sole judgment of market operators, in which banks do their job, which is to finance economic development rather than engage in speculation," Mr Sarkozy, who holds the rotating presidency of the European Union, told the assembly.

Both Mr Sarkozy and his Brazilian counterpart Luiz Inacio Lula da Silva pressed for a sweeping reform of multilateral institutions, including the powerful Security Council.

The French leader said enlarging the 15-member UN Security Council as well as the G8 club of leading industrialised nations - Britain, Canada, France, Germany, Italy, Japan, the United States and Russia - was not "just a matter of fairness, (but) also the necessary condition for being able to act effectively".

Mr Lula da Silva made a similar point, noting that "only legitimate and effective instruments can assure collective security".

"The United Nations has spent 15 years discussing the reform of the Security Council," he noted. "Today's structure has been frozen for six decades and does not relate to the challenges of today's world."

Mr Lula da Silva welcomed the General Assembly's decision last week to begin inter-governmental talks on expanding the powerful Security Council no later than February 28.

He also stressed that the economic international institutions today have neither the authority nor the instruments they need to stop the anarchy of speculation.

"We must rebuild them on an entirely new basis," he added.

 

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