PARIS (AFP) - President Nicolas Sarkozy on Monday battled to contain fallout from the global financial crisis, moving ahead with plans for a world summit and calling a meeting of French banking and insurance chiefs.
France will host a meeting of European officials to prepare a summit "in the coming weeks to establish the basis of a new international financial system," said Sarkozy, whose country holds the presidency of the European Union.
Officials from Britain, France, Germany and Italy -- the EU members of the G8 -- will meet in Paris in the coming days to lay the groundwork, he said on the sidelines of an EU-India summit in the southern city of Marseille. On Tuesday, the president is to meet at the Elysee presidential palace with banking and insurance company chiefs to take a close look at the health of French banks and review the credit level of French households and businesses.
The announcements came as the Franco-Belgian bank Dexia announced an emergency board meeting after liquidity concerns sent its shares into freefall. Dexia's shares closed Monday down 30 percent on the Paris exchange, at seven euros worth less than a third of their value this time last year.
Belgium's federal government announced late Monday that it had tentatively agreed, along with its three main regions and shareholders, to help prop up the embattled bank -- less than 24 hours after stepping in to rescue Belgian-Netherlands banking and insurance giant Fortis. "During consultations between the federal government and the three regional governments (Wallonia, Flanders and Brussels) this afternoon, they confirmed their in-principle agreement to take part in a joint effort to boost Dexia group's funds," a statement said. The statement, distributed by the office of Prime Minister Yves Leterme, made no mention of financial details but Belgian media said the support could amount to seven billion euros (10 billion dollars). On Sunday, the Benelux countries stepped in to partially nationalise Fortis, increasing fears the crisis that has wiped out several US and British banks was spreading across Europe.
Sarkozy warned in a major address last week that France would not be spared from the turmoil unleashed by the US banking crisis.
In Paris, the CAC 40 index plunged 5.04 percent to 3,953.48 points Monday in line with other European stock markets.
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