Europe Will Not Follow U.S. To Resolve Financial Crisis

October 4, 2008 12:38 p.m. EST

Paris, France (AHN) - The Leaders of France, Germany, Italy and the United Kingdom are meeting in a small summit hosted by French President Nicolas Sarkozy on Saturday to formulate a rescue plan for the Euro zone.

However, the leaders have ruled out the possibility of using similar bailout plans as the U.S. government did to rescue financial firms on Wall Street.

Over the last few weeks, the authorities and regulators in the European region have taken several measures to rescue large financial firms such as Belgium's largest financial-services company Fortis NA, Britain's largest lender to landlords Bradford & Bingley PLC, Franco-Belgian lender Dexia and Germany's Hypo Real Estate.

The mini-summit follows the approval of $700 billion financial-rescue legislation that will allow the U.S. Treasury to buy troubled mortgage-linked assets from the financial firms as subprime crisis deepens.

The meeting between the leaders comes ahead of next week's G8 Summit in the U.S. as the subprime mortgage crisis spilled over to European nations, forcing governments to infuse capital to prevent financial services firms from collapsing.

Early Saturday, U.K.'s Prime Minister Gordan Brown announced that the authorities will funnel $21 billion (15 billion euros) in to the money market.

Reports said Sarkozy is expected to discuss the ways to increase security of the region's financial system, to prevent credit markets from slumping, to formulate a coordinated economic and monetary strategy, and to improve firms' balance sheets and lending capacity.

As of last month, so far the global stock-market has lost a value of over $19 trillion from the start of the U.S. subprime mortgage contagion.