Page last updated at 19:06 GMT, Tuesday, 28 October 2008

Brown and Sarkozy in action call

Gordon Brown and Nicolas Sarkozy
Mr Brown and Mr Sarkozy have been meeting in Paris

UK PM Gordon Brown and French President Nicolas Sarkozy have warned urgent action is needed to prevent the current financial malaise spreading.

Mr Brown said the first priority was "to stop the contagion to other countries, including in eastern Europe" where there were "problems emerging".

He said the IMF would have to create a new fund to help struggling nations.

And Mr Sarkozy also wants a crisis fund for EU member states expanded from 12bn euros ($15bn;9.6bn) to 20bn euros.

The two leaders were meeting in France to coordinate their positions before the forthcoming US and European summits on the global financial crisis.

Their talks came as the Bank of England said the world's financial firms had now lost 1.8 trillion ($2.8 trillion) as a result of the continuing credit crisis.

'Global fund'

Mr Brown said a summit of world leaders in Washington on 15 November would be a defining moment for how countries work together to tackle the problem.

And he added that both Britain and France shared an interest in ensuring that the International Monetary Fund had the resources to deal with the global economic crisis.

The British and French leaders spell out their plans to halt the economic downturn

"Nicolas and I will be talking about the global fund that the International Monetary Fund will have now to create to build on its own resources to help economies that are in difficulty to prevent contagion coming from their countries into our countries," he added.

Meanwhile, Mr Sarkozy said: "I will propose on 7 November that the European Union itself, which has available to support a certain number of liquidities and to support a certain number of states, should go up to at least 20 billion (euros) to increase our capacity to respond to the crisis."

'Hand in hand'

Mr Brown and Mr Sarkozy have been leading calls for reforms to the world's financial system.

"We have to find ways and means for the IMF to have more resources to help a certain number of states, I am thinking in particular of emerging nations," Mr Sarkozy said.

They have also been at the forefront of European measures to stabilise banks and try to restore confidence to markets.

Mr Sarkozy said France and Britain were working "hand in hand" to find solutions to the current international financial crisis and to ensure the EU had a common position.

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