More Oversight

While the situation remains serious, European Commission President Jose Manuel Barroso said Wednesday, March 4, it was up to politicians to show people the ongoing economic crisis was being addressed.

"We must send a strong signal to our citizens, businesses and the global community that there is a way out of this crisis," he told reporters.

A report last week by former International Monetary Fund chief Jacques de Larosiere called for the creation of such a system after three years' trial. But Barroso said "this should be done immediately."

Larosiere's report called on EU governments to create three supra-national authorities to oversee the bloc's financial markets in a bid to make Europe's banking system proof against future crashes. Barroso added that the new regulation authorities should watch over all markets.

"There should be no financial entity that escapes from financial regulation, neither in Europe nor the rest of the world," Barroso said. "All financial entities should be subject to a certain degree of regulation and supervision. No territory, state or individual can separate and work underground."

International cooperation required

The authorities would be required to strengthen cooperation between national regulators in the EU's 27 member states and provide early warnings across the bloc of looming problems such as the collapse of the market for poorly secured sub-prime mortgages in the US, which sparked the current crisis.

Barroso said the commission would draft a law setting up the bodies by the end of May. The Brussels-based executive is due to propose laws on regulating hedge funds, private equity and executive pay in early April.

EU member states would have to approve any such laws before the proposed authorities could begin work.

Barroso urged member states to hurry up and spend the hundreds of billions of euros they have pledged to help restart economic activities, and to back a commission plan to spend 5 billion euros ($6.3 billion) in "unspent EU funds" on energy and Internet-related projects.

The latter plan is disputed by member states which say that the money is not in the EU's budget, but their own state coffers.

Barroso further called on member states to help those who have lost their jobs in the crisis find new positions, saying that up to 3.5 million Europeans could become unemployed this year.