EU lowers expectations for speedy accord on new global financial architecture

BRUSSELS — European Union governments on Tuesday watered down a French call for speedy international agreement on a range of specific measures on the credit crisis, lowering expectations for a summit meeting this month that is to deal with global financial reform.

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The move suggests that the meeting, a gathering the world’s largest economies on Nov. 15, will be just the start of efforts to agree on a new global financial architecture.

Tuesday’s meeting of the 27 EU finance ministers was one of two gatherings to prepare a common European position for the G-20 summit meeting, which is to take place in Washington next week. That meeting aims to chart a way out of the economic and financial turmoil produced by the global credit crisis and seeks to figure out ways to prevent it from happening again.

It has been described as a «new Bretton Woods,» a reference to the agreement that set up the post-World War II international financial system.

But the debate among EU finance ministers on Tuesday suggested that most governments thought the task of restructuring financial institutions would require negotiation over several months.

The process is likely to be slow as well because President George W. Bush will be a lame duck, and there has been relatively little debate with emerging economies over such issues as reform of the International Monetary Fund.

France put forward a detailed, 10-page plan on Tuesday but ran into objections from several countries, a diplomat said on the condition of anonymity because of the sensitivity of the issue.

Among the problems were fears that there would be too much regulation or too great a role for the EU in coordinating economic measures. Britain is concerned about proposals to change capital adequacy requirements — how much money banks need to hold to cover risks.

«The general feeling,» the diplomat said, «was that this was going too far too soon. The crisis hasn’t peaked yet, but the French have already come up with a very detailed list of what to do.»

Among other measures, the document called for an agreement on Nov. 15 to submit rating agencies to registration; ways to reduce incentives to excessive risk taking; harmonize capital adequacy standards; and encourage an internationally coordinated response to the macroeconomic challenges as recession looms.

«It could be interpreted that we are aiming for a coordinated, overarching economic policy» at EU level, said Peer Steinbr�ck, German finance minister. «We would be very skeptical about that. We don’t need a European economic government.»

Ministers from the 15 euro-zone nations on Monday night ruled out a joint economic stimulus package.

After Tuesday’s meeting, the French finance minister, Christine Lagarde, said the proposal would be used as the base for a new paper, which will be considered by EU leaders at a summit meeting in Brussels on Friday.

Though she said there was great support for the French plan, Lagarde conceded that some points would be altered. «What we are trying to do is to gather as many points of view, proposals as possible,» Lagarde said. «We should not overregulate, but we also need to make sure we don’t leave loopholes in the regulation.»

French diplomats said their new plan would be more general and political in nature.

Reflecting calls for a less ambitious approach in Washington, the Czech finance minister, Miroslav Kalousek, said he would like the European Union and United States «to agree on the need to coordinate principles and rules.» The Czech Republic will take over the rotating the EU presidency from France on Jan. 1.

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DEL