The European Council declared Thursday that the European Union (EU) leaders had agreed on the need for coordinated economic policies to deal with current and future financial crises.

At the two-day summit in Brussels, the 27 EU member states agreed to back plans put forth last weekend by the 15 members of the Eurozone to protect troubled banks. The Eurozone leaders presented the plan to the summit Wednesday. (The Eurozone represents countries that use the EUR as currency.)

The plan involves banks' refinancing, guarantee of interbank lending, and measures to protect troubled banks from insolvency.

The Council decided to set up a mechanism to allow a rapid and coordinated reaction in the event of an emergency and to reinforce the supervision system and prudential standards at European level. It welcomed the adoption of accounting norms reflecting the fair value of assets. Among the items agreed to at the summit is that the pay and bonuses of company executives must reflect their performance, and that it should also be in line with their company's success.

EU officials also plan to meet with leaders of other countries to start reforming the world's financial institutions. French President Nicolas Sarkozy, whose country holds the rotating EU presidency, and European Commission President Jose Manuel Barroso are going to meet with US President George Bush at Camp David, Maryland, this Saturday.

Sarkozy said Thursday that the decisions taken in Europe were the right ones and Europe was setting an example for the rest of the world in how to deal with the economic crisis.

The Council also adopted a series of specific guidelines for the energy-climate change package which will be implemented in the coming months and the European Pact on Immigration and Asylum, which will form the basis of a common immigration policy for the EU.

The Council heard the Irish prime minister's analysis of the Irish referendum on the Treaty of Lisbon and agreed to review the issue in December in order to find an approach to take for 2009.

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