Leaders urge key IMF role in credit crisis

Beijing: Asian and European leaders called on Friday for a coordinated response to the global financial meltdown and prepared to endorse a critical role for the International Monetary Fund in aiding the hardest-hit countries.

Speaking in Beijing on a day when stock markets plunged across Asia, Chin-ese President Hu Jintao told assembled leaders of 43 nations that the crisis had badly dented China's economic juggernaut.

"The global financial crisis has noticeably increased the uncertainties and factors for instability in China's economic development," Hu said in remarks at the opening of the biennial Asia-Europe Meeting, known as ASEM.

China has made "active efforts to the best of its ability" to mitigate the crisis and will work with the international community to revive stability "with a sense of responsibility," Hu said, pledging his government would vigorously expand domestic demand and maintain healthy financial markets.

The two-day ASEM summit seeks to build consensus on how to respond to the crisis ahead of a November 15 meeting of the 20 largest economies in Washington, D.C.

What emerged yesterday was strong sentiment in favour of rewriting rules for overseeing the global economy and a leading role for international financial institutions such as the IMF.

A draft of a meeting statement on the crisis seen by The Associated Press called on the IMF and other financial institutions to act immediately to help stabilise struggling banks and staunch the flood of red ink on regional stock exchanges.

"Leaders agreed that the IMF should play a critical role in assisting countries seriously affected by the crisis, upon their request," the draft said.

If adopted, the statement would be among the strongest calls yet for a leading role in the crisis for the IMF, long known as the international lender of last resort.

Countries as disparate as Hungary, Ukraine, Iceland and Pakistan have already turned to the IMF for help in bridging liquidity crunches.

The draft statement said leaders agreed to "undertake effective and comprehensive reform of the international monetary and financial systems."

"They agreed to quickly take appropriate initiatives in this respect, in consultation with all stakeholders and the relevant international financial institution," it said.

Japanese Prime Minister Taro Aso, leader of the world's second-largest economy, "strongly supports" a critical role for the IMF, Japanese Foreign Ministry spokesman Kazuo Kodama said.

In remarks at the opening ceremony, French President Nicolas Sarkozy called for a united Asia-Europe front at the Washington meeting.

"Europe would like Asia to support our efforts and would like to make sure that on the 15th of November we can face the world together and say that the causes of this unprecedented crisis will never be able to happen again," Sarkozy said.

ASEM has no mandate to issue decisions and participants, ranging from free-trading Singapore to Laos, differ widely on their views toward international cooperation and intervention by global bodies.