EU pulls together – not before time

To be sure, whatever common ground was staked out still seems rather sprawling. Leaders agreed to sweeping plans on financial regulation, but the details remain conveniently nebulous. Disagreement remains about relative priorities: France wants to regulate hedge funds, while Britain, home to most of Europe's hedge fund industry, talks more about cracking down on tax havens. Chancellor Angela Merkel of Germany, who hosted the meeting, insisted that discussions focus on long-term financial reform rather than co-ordinating short-term responses to the crisis. It is tempting to remind the chancellor of Keynes' maxim that we are all dead in the long run.

Ms Merkel's summary statement did indeed smack of reorganising the fire brigade while the blaze is still out of control. But reorganising the fire brigade – reshaping the global financial system – is a necessary task. Getting it right will take time, but it must not be postponed. The commitments made in Berlin – comprehensive regulation of financial markets (including hedge funds), countercyclical capital requirements, sanctions against tax havens, and an international early warning system – are all sound initiatives in principle.

Yet the EU must also turn its attention to the bonfires on its eastern frontier. The difficulties in central and eastern Europe's banking and currency markets continue to grow. There is still a lack of urgency in Brussels and other European capitals in recognising what is at stake: a Europe whole and free after the end of the cold war.

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