Sarkozy, Brown hold financial talks in sign of warming ties

PARIS (AFP) — Prime Minister Gordon Brown was to meet French President Nicolas Sarkozy for the third time this month on Tuesday, in a sign of increased cooperation between London and Paris on the economic crisis.

France's traditionally close bond with Germany has been tested by sniping between the offices of Sarkozy and Chancellor Angela Merkel, while Brown has become a regular visitor to Paris since the credit crunch hit.

Sarkozy, the current holder of the European Union presidency, hopes to build a common European front at a Brussels summit next week, ahead of a meeting of the G20 group of current and emerging powers in Washington on November 15.

The French leader has said he would like to see the world agree to "refound the global financial system", and needs all the support he can get.

Brown has been more cautious on the role governments should play in the new order, but has also been keen to show leadership on reforming world finance, with the spectre of recession haunting Europe and the world.

The pair were to meet later Tuesday at La Lanterne, Sarkozy's private residence in the forested park around the Palace of Versailles west of Paris, but first their ministers for Europe met at the French foreign ministry.

Afterwards, both ministers agreed on the need to forge a common European stance ahead of November's G20 sumit.

"This is not just an EU problem, it's not a eurozone problem, a UK or a French problem, it's a global problem," said Caroline Flint, Britain's minister for Europe, after talks with her counterpart Jean-Pierre Jouyet.

"Our discussions at EU level can only help us be prepared and persuasive when it comes to looking at what sort of changes we need at a global level to make sure we can limit the damage," she said.

Jouyet said London and Paris had agreed on "the need for tight international cooperation and for Europe to come (to the G20) united, carrying a common vision of a new economic and financial order."

He said the meetings showed that "relations between our countries have never been so intense, and the cooperation never so tight."

Long known as a sceptic towards the European Union, Brown was thrust centre stage this month as the 15 nations in the euro single currency used Britain as the model for a united bank rescue plan.

Throwing out the usual protocol, Sarkozy invited Brown to Paris to brief eurozone members on his plan, and both won plaudits in their respective national media for taking charge of the situation.

On wider reform of the international financial sector, Brown and Sarkozy have also led calls for far greater global regulation and a new role for the International Monetary Fund (IMF) to avert future crises.

In contrast, France has clashed repeatedly with its traditional European ally Germany over the response to the crisis, with Merkel leading resistance to Sarkozy's proposal to create an "economic government" for the eurozone.

Sarkozy would also like to see Europe set up national sovereign wealth funds to shelter strategic parts of their economies from global turmoil -- moves that are anathema to Merkel's more laissez-faire approach.

For Jean-Pierre Maulny, deputy director of the Institute for International and Strategic Research, the ad-hoc cooperation between Sarkozy and Brown on the finance crisis could mark the start of a longer-term shift in Europe.

"Given the importance of the issues involved, it could have consequences for the balance of power in Europe. That could weaken and alarm the Germans."

But Philip Whyte, senior research fellow at the Centre for European Reform, warned not to "read too much" into the thawing of ties.

"When it comes down to long-term considerations of France's interest, Germany remains the primordial relationship," Whyte said.