updated 10/16/2008 2:57:21 PM ET 2008-10-16T18:57:21

European Union leaders agreed Thursday to stick to their ambitious plan to cut greenhouse gases despite concern about the impact on industries already struggling with the global market meltdown.

"The objectives remain unchanged, the calendar remains the same," French President Nicolas Sarkozy told a news conference at the end of the two-day summit. "The deadline on climate change is so important that we cannot use the financial and economic crisis as a pretext for dropping it," he said.

Poland and six other Eastern European nations had infuriated other EU member states with a surprise demand that the bloc drop a December target for agreeing details of the plan to fight global warning, which aims to reduce greenhouse gas emissions by 20 percent by 2020.

Together with Italy, they were concerned that the costs of going green, combined with the looming economic downturn sparked by the turmoil on financial markets, would be too much for European industry to bear.

Although all 27 leaders agreed in the end to stick to the objectives, Sarkozy acknowledged that he faced a tough task ahead in getting a unanimous deal on how to share out the burden of the the switch to cleaner energy by the December deadline.

To help industry, the EU leaders agreed to consider a a stimulus package for the economy. Sarkozy pointed particularly to the auto industry, which is demanding a $54 billion bailout fund.

"Can you ask the European car industry to provide clean cars, change the whole industrial apparatus, without giving them a helping hand?" Sarkozy asked.

He said European car makers might need a state cash injection, similar to a U.S. government US$25 billion low-interest credit line for General Motors Corp., Ford Motor Co. and Chrysler LLC announced last month in Washington.

Sarkozy said the EU's executive body, the European Commission, would come up with concrete measures to help industry before the bloc's next summit, in December. They will have to overcome doubts of some nations who are wary of pumping government aid into industry.

The leaders confirmed their approval of a $2.3 trillion emergency bailout for the banking sector and the call for a concerted global approach to revamp the world's financial system to prevent a repeat of the crisis devastating money markets.

In a compromise on climate change, the leader agreed to stick to the December deadline but would work to ensure a fair sharing of the burden to avoid penalizing the former Communist nations who depend largely on carbon-heavy coal for their power.

"We want a package that will be tolerable for the poorer member states," said Polish Prime Minister Donald Tusk.

The EU plan would cost governments and business billions of dollars to implement new cleaner technologies, renewable energy sources, and reduce emissions from cars and factories. Italian President Silvio Berlusconi said that would put Europe at a disadvantage to competitors in China and the United States.

Supporters of the plan countered that taking a world lead in switching to green energy would bring economic advantages to Europe.

The EU's environment agency, meanwhile, said that 15 EU nations were on track to meet another target to cut greenhouse gas emissions by 8 percent by 2012 thanks to "expected outstanding performance" by Britain, Germany and Sweden.

British Prime Minister Gordon Brown said an agreement in December on how to achieve the emissions cuts would enable Europe to take the lead in discussion with the new U.S. administration next year on a global climate change agreement.

Sarkozy will head to the United States at the weekend for talks with U.S. President George W. Bush to push European calls for a thorough reform of the world financial system that will "recast the capitalist system."

He wants a meeting of the world's major economic powers — including China, Russia and India — in November, possibly in New York, to plot an overhaul of the financial markets similar to the 1944 meeting in Bretton Woods, New Hampshire which set out the rules of international trade and financial relations.

Among the issues the Europeans want to see on the table of the international talks are supervision and regulation of markets, reducing bank secrecy, early warning systems to detecting impending crises and coordinating a rapid international responses.

"We're talking about a market economy with rules, that is the European model," said European Commission President Jose Manuel Barroso who will join Sarkozy for the talks Saturday at Bush's presidential retreat at Camp David.

For the first time, EU governments took a step toward European supervision of banks — something nations including Britain have resisted for years. They said national watchdogs need to meet at least once a month. They also set up a financial crisis cell to swap information.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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