January 29, 2008 (Nouvelle Solidarité), PARIS – German Chancellor Merkel, British Prime Minister Gordon Brown, French president Nicolas Sarkozy and Italian PM Romano Prodi (in the only meeting he will honor before resigning) will meet tonight in London to discuss the international financial crash. Organized by Brown, the summit is rumored to become a confrontation between two lunacies: on the one hand Brown and Merkel oppose any form of strict regulation of the financial markets and reject any form of "protectionism", in favor of maintaining the present system in which markets regulate themselves under light government supervision, combined with an "early warning system" operating under strengthened IMF global supervision!

On the other side, Sarkozy seems to go along with the proposals of Prodi's economics minister Tommaso Padoa-Schioppa (formerly at the ECB but also president of the economic and finance committee of the IMF!) who wants to impose a single financial regulation agency for all of Europe imposing common rules, an idea he defended at the December 2007 meeting of Ecofin and also proposed when the four finance ministers met in London on January 14, 2008. At that time, Brown, with Merkel's support, blocked the Italian proposal. The proposal aims at uniting the three different agencies in charge or regulation in Europe today: 1) The Committee of European Securities Regulators (CESR) that regroups national financial watchdog agencies life the German Bafin or the French AMF; 2) The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS), that supervises insurances; and 3) The Committee of European Banking Supervisors (CEBS) that includes supervisors of central banks and the ECB.

While uniting these three agencies is supposed to achieve "more transparency", the leading French economic daily {Les Echos}, in unusual words, says that tonight's meeting in London also "looks for answers for the three main questions harassing all nations today: how to avoid the collapse of the international financial system, how to preserve economic growth and how to guarantee that such type of crisis will not happen again in the future."

Note here that according to today's {Le Figaro}, "Paris wants to go even further [than regulation]. For the last couple of days, the French leaders have been contacting other European capitals trying to convince them of the necessity to organize a summit of [the 15] chiefs of state of the euro zone. This time the task seems even more difficult, with the Germans siding with London's long-standing opposition to such a plan. Ferociously attached to the independence of the ECB, Berlin fears this initiative aims to pressure the ECB for a more accommodating monetary policy." An AFP wire reports that the German daily Süddeutsche Zeitung is worried about the interventionist temptation of France: "By nature, the French political figures want the state to intervene to solve problems" while London gives the privilege to the self regulation of the financial sector.