“Firm, decisive and effective measures in a responsible and timely manner.”
BEIJING, China (CNN) — Asian and European leaders vowed Saturday to act together to address the global financial crisis, calling for decisive action following a two-day summit in the Chinese capital. The ASEM meeting brought together the leaders of 43 Asian and European nations, along with the heads of the European Commission and ASEAN, a group of southeastern Asian nations.
“Europe and Asia have come together in Beijing at a time of global crisis, and indeed, we are in a moment where we need global teamwork,” said EC President Jose Manuel Barroso. “We either stick together or we sink together.” While the summit is usually a forum for political, economic and cultural issues, it has taken on added significance this year because of the unfolding crisis.
On Friday leaders at the summit called for new rules in dealing with international finance. They also urged a leading role for the IMF to help countries like Iceland and Pakistan that are struggling with the current crisis. “Europe would like to try and come up with a common position among all of us as to a common response to this unprecedented financial crisis,” said French President Nicolas Sarkozy, whose country currently holds the rotating presidency of the European Union. “This was a very useful and very promising summit. Europe and Asia have many things that they can do together.”
In a statement released Friday, the ASEM nations said the crisis can be overcome if all countries take “firm, decisive and effective measures in a responsible and timely manner.” They called on the international community to boost coordination and cooperation to restore market confidence, stabilize the markets, and promote financial growth. Chinese Premier Wen Jiabao said investor confidence will ultimately help the world get through the crisis, so that should now be a key focus.
Wen also urged cooperation among countries, especially in clarifying the role of government, companies and regulators. “We need even more financial regulation to ensure financial stability,” he said. “We need to properly handle the relationship between savings and consumption, or accumulation and consumption. We need to keep savings and consumption at a normal, balanced and coordinated relationship with each other. Only in this way can we coordinate economic stability.”
Countries must also coordinate the virtual economy with the real economy, Wen said. The healthy development of the virtual economy, he said, will facilitate the growth of the real economy. Wen and Sarkozy also looked ahead to next month’s financial summit of G20 leaders in the United States.
“Europe wishes that Asia will support our efforts so together we can tell the world on November 15 that the causes of this crisis, which has no precedence, will not continue to be reproduced on the financial and monetary system,” Sarkozy said Friday.
Friday’s joint statement said there must be more supervision and regulation of all “financial actors” and that they need to be kept accountable. They said all countries need to strengthen oversight and crisis management mechanisms. Also Friday, U.N. Secretary-General Ban Ki Moon said central banks and the IMF may have to set up major credit lines to bolster emerging economies and help the world’s poor affected by the credit crisis.
“Too often, in recent weeks, financial leaders have been criticized for being too slow to recognize problems, for doing too little too late,” he said in a statement. “Let us not repeat the mistakes of the past.” Asian countries have not been as sharply affected by the current crisis as those in Europe, in part because they weren’t as exposed to the subprime mortgage problems.
Still, growth in Asia is slowing. China announced this week that its GDP growth had slowed to 9.9 percent in the first three quarters of the year — the lowest in five years.