HISTORIC PRESS RELEASE : EU has “shared understanding” of financial crisis [October 2008]

The press release issued by 10 Downing Street on 20 October 2008.

The European Union has a “shared understanding” of the ongoing crisis in financial markets and is committed to reforming the global financial system, the PM has said.

Speaking to MPs in the House of Commons, the Prime Minister said that EU leaders convening in Brussels at last week’s EU Council had agreed to provide medium term lending guarantees in member states similar to those extended by the Government in the UK.

The PM said:

“At the heart of our considerations was our shared understanding that the massive reduction in global financial activity and the fracturing of the global financial system has been the result of irresponsible and often undisclosed lending that started in American sub prime markets.

“And while national action is necessary, the root problem can only be dealt with only changes in our financial systems – to recapitalise banks and to reform provision around the principle of rewarding hard work enterprise and responsible risk taking but not irresponsibility and excess.”

Mr Brown said that the EU also reached “important conclusions” on energy and climate change, affirming its commitment to reach agreement by December on its 2020 climate change package. World leaders will gather in Copenhagen next year to take forward efforts to replace the Kyoto Protocol on climate change that expires in 2012.