Smash hit

Mr Sarkozy called the Paris meeting on the heels of a G7 summit in Washington that offered no concrete action but promised to take the necessary action to unfreeze credit markets.

The markets are expected to remain sceptical until figures are attached to the European deal. In Germany, media reports said that the Government in Berlin was preparing a rescue that could be worth up to €400 billion, including the injection of tens of billions into its banks and lending guarantees.

Meanwhile, in Westminster Gordon Brown is to ready break with nearly three centuries of tradition by moving the centre of government operations out of No 10.

He is not forsaking the most famous street in the country, or even leaving the building, which has housed every chancellor and prime minister since Walpole. But as the financial crisis intensifies and he faces up to the need to make ever faster decisions, he is moving the nerve centre of the Government 40 yards along the corridor from No 10 to set up a new open-plan office in No 12 Downing Street.

There, within weeks, he and his most senior officials will be carrying out the day-to-day work of state.

The inspiration for the move is the mayor’s office in New York. When Mr Brown visited Michael Bloomberg at New York City Hall soon after becoming Prime Minister he was attracted by the bustle and vigour of the mayor’s open-plan office.

The Prime Minister said he had decided to go open plan to boost the efficiency of the Downing Street operation and to match the growing pace of modern events.

Downing Street is a warren with offices in nooks and crannies on different floors. It takes time to get people together and just as Mr Brown is calling on the world to co-ordinate its efforts on the economic crash, so he wants to make the decision-making process in No 10 more streamlined and efficient.

But the move is bound to be seen as another sign that Mr Brown is moving into a campaigning mode in the long run-up to the next general election.

It will revive memories of a big similar operation in Millbank Tower, London, as Mr Brown, Tony Blair, Alastair Campbell and Peter Mandelson prepared for power in the days before the 1997 election.

European unity:

The eurozone leaders said:

“Further concerted action is urgently needed given the lasting freeze of the interbank market and the contagion from the financial crisis to the real economy. This requires European Union and euro area governments, central banks and supervisors to agree to a co-ordinated approach”. They will:

— guarantee medium-term loans between banks and take steps to recapitalise and if necessary restructure failed banks

— ensure appropriate liquidity conditions for financial institutions.

— facilitate the funding of banks

— provide financial institutions with additional capital resources

— allow for an efficient recapitalisation of distressed banks

— ensure sufficient flexibility in the implementation of accounting rules

— enhance co-operation among European countries

For an “interim period” governments will guarantee interbank loans of up to five years “on appropriate commercial terms” by a variety of means, including issuing securities. The scheme will be limited in amount, temporary, and will be applied under close scrutiny of financial authorities until December 31, 2009.

“Governments remain committed to avoid any failure of systematically relevant institutions, through appropriate means including recapitalisation. In doing so, we will be watchful regarding the interest of taxpayers and ensure that existing shareholders and management bear the due consequences of the intervention,” the 15 leaders pledged.

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