EU heads back financial clampdown

Leaders of Europe's major economies said a global solution was needed to the current financial crisis.

German Chancellor Angela Merkel highlighted that leaders faced an "extraordinary international crisis".

But leaders including UK Prime Minister Gordon Brown warned against reverting to protectionism in such a difficult economic climate.

The Berlin gathering is a precursor to the next meeting of the G20 group of major developed and developing countries in London on 2 April, which aims to rewrite the rules of the global financial system.

"There is a need for a global new deal so that the world economy can recover" said Mr Brown to ensure an economy that is based on the "soundest principles".

Leaders said there was a need for international institutions, including the International Monetary Fund, to play a greater role not just to help countries in financial trouble but to prevent countries from getting into such difficulties.

Mr Brown said leaders had agreed that that the IMF needed access to at least $500bn (£348bn).

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But analysts say reaching agreement among EU powers will not be easy.

The current Czech presidency of the EU, as well as and the European Commission, have voiced concern at attempts by France, Italy and Spain to shelter their car industries from the effects of the downturn.

The BBC's Rob Cameron in Berlin says Czech Prime Minister Mirek Topolanek - who is also in Berlin - will have a private meeting with French President Nicholas Sarkozy, following a very public row between the two countries.

Mr Sarkozy has suggested that in order to secure government aid, French carmakers should move production out of their East European factories and back to France.

Such disagreements are threatening to prevent Europe speaking with one voice, our correspondent adds.

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