Asian nations commit to $80 billion emergency fund

Beijing: Asian nations on Friday recommitted themselves to establishing an $80 billion emergency fund, as leaders from across Asia and Europe gathered in Beijing to discuss the global financial meltdown.

The pledge by South Korea, China, Japan and the 10-country Association of Southeast Asian Nations (ASEAN) was reached at a breakfast meeting, according to the office of South Korean President Lee Myung-bak, who attended the meeting.

Few details were given, although a preliminary agreement reached in May stated that Japan, South Korea and China would contribute 80 percent of the fund, to be set up by next June, with ASEAN countries covering the remainder.

ASEAN consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The deal would enable countries to borrow from the fund when facing a liquidity crunch.

It builds on the so-called Chiang Mai Initiative, in which the 13 nations set up bilateral contracts to supply funds through currency swap lines.

The summit of 43 Asian and European nations later on Friday hopes to establish a consensus on a common approach to the global crisis.

The meltdown has injected a new sense of urgency into the normally plodding biennial Asia-Europe Meeting, known as ASEM, with EU Commission President Jose Barroso saying "unprecedented levels of global coordination" are needed
to deal with the crisis.

"It's very simple: We swim together, or we sink together," Barroso said at a news conference Thursday in Beijing ahead of meetings with top Chinese leaders.

Chinese President Hu Jintao issued a similarly grim assessment in remarks Thursday to Indonesian President Susilo Bambang Yudhoyono.

"The current world economic situation is grim and complicated," Hu said. "The emerging markets and developing countries are confronted with financial risks, weak foreign demand and mounting inflation."