Finance news

French President Nicolas Sarkozy and German Chancellor Angela Merkel paved the way on Saturday for European measures to tackle the global financial crisis but revealed little about their plans.

Sarkozy, whose country holds the rotating six-month presidency of the European Union, has called an emergency meeting on Sunday of the 15 countries that have the euro as their currency, with a view to taking steps to stop the rot.

“We have prepared a certain number of decisions that we will submit to our partners in the presence of the president of the European Commission and the governor of the (European) central bank. You understand that it is not appropriate for us to talk about it,” Sarkozy told a joint news conference with Merkel.

While the leaders would not provide details, they vowed to act in a coordinated manner, but ruled out an EU-wide bank rescue fund, an idea which EU officials say France originally floated but has since been scrapped in the face of opposition from Germany and others.

“We know where we want to get to and how we want to get there, but first we want to coordinate between the euro zone countries and then all of Europe,” Sarkozy said, adding that he would meet British Prime Minister Gordon Brown before the Eurogroup meeting on Sunday afternoon.

A source close to the French presidency said the euro zone leaders would discuss the possible creation of a bank rescue package which will take Britain’s initiative as a reference.

“There are two competing models. The American model, which no one wishes to draw inspiration from, and the British model. This is what everyone is talking about,” the source said, on condition of anonymity.

Britain’s rescue plan, launched last week, involved injecting 50 billion pounds ($86 billion) of taxpayers’ money into its banks and, crucially, to underwrite interbank lending which has all but frozen around the globe. 

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