| European Union (EU) leaders endorse a concerted action plan adopted by their eurozone members to fight the financial crisis, according to draft conclusions of an EU summit on Thursday.
The European Council, official name of the EU leaders' meeting," welcomes the concerted action plan of the euro area countries," the document said.
Leaders from the 15 EU countries that use the euro hammered out an action plan in a joint response to the unfolding financial crisis at their first ever summit in Paris Sunday.
Among those agreed measures, eurozone governments would, acting on national basis, buy into banks to boost their finances and temporarily guarantee bank refinancing to ease the credit crunch, which was modeled after the British bailout package.
In line with the action plan, several eurozone countries led by Germany and France launched their most united defense so far against the financial crisis on Monday, pledging more than 1 trillion euros (about 1.35 trillion U.S. dollars) to save troubled banks.
Europen Union leaders pose for a group photo during a European Union leaders summit in Brussels October 15, 2008. EU nations are set on Wednesday to back calls for a root-and-branch overhaul of the world's financial structures in a bid to ensure no repeat of the worst credit crisis since the 1930s Great Depression. (Xinhua/Reuters Photo)
EU leaders say they welcome the measures adopted by the member states in conformity with the principles of the plan, calling on member states to ensure that their future national measures also respect those principles and to take account of the possible effect of their decisions on others.
They would pledge to take necessary measures to preserve the stability of the financial system, to support the major financial institutions, to avoid bankruptcies and to protect savers' deposits.
The European Commission proposed on Wednesday to temporarily raise the minimum guarantee that EU member states must offer savers' deposits.
Under the proposal, the minimum level of coverage for deposits in all EU countries will be increased within one year from 20,000 euros (27,000 dollars) to 100,000 euros (135,000 dollars), and initially to 50,000 euros (67,500 dollars) in the intervening period.
Individual member states can choose to add to these minimum levels. In addition, the payout period in the event of bank failure will be reduced from three months to three days.
The Commission said the new rules were designed to improve depositor protection and to maintain the confidence of depositors amid the financial crisis, which has been devastating Europe in recent weeks.
In a bid to enable speedy and effective action to be taken in a crisis situation, EU leaders were poised to decide to establish an informal warning, information-exchange and evaluation mechanism, so-called financial crisis cell, which would bring together representatives of the EU presidency, the president of the Commission, the president of the European Central Bank (ECB) and the president of the euro group.
EU leaders would also stress the need to strengthen the supervision of the European financial sector, particularly cross-border groups, with a view to developing a coordinated supervision system at European level.
The Commission is preparing legislative proposals to strengthen the rules on rating agencies and bring down fat executive pay in financial institutions to avoid excessive risk taking.
The EU decided on Wednesday to ease its accounting rules so as to help its banks and financial institutions cope better with the financial crisis.
Under the changes, financial institutions in the EU would no longer have to reflect market fluctuation in their financial statements for those toxic assets which were at the root of the financial crisis as from the third quarter of 2008.
(Xinhua News Agency October 16, 2008) | 
