EU leaders gather to discuss market, Russia ties

Brussels, Oct 15 (RIA Novosti) European Union (EU) leaders gathered here Wednesday for a two-day summit that will focus on the global financial crisis and the bloc's relations with Russia.

The 27 member states will seek to coordinate their response to the worldwide market crisis based on the consensus the Group of Seven (G7) leading industrial nations reached in Washington over the weekend.

European Commission chief Jose Manuel Barroso said Tuesday there was no consensus among the EU members on the need for greater coordination, particularly regarding the possibility of establishing a pan-European regulator to oversee financial institutions.

But he hoped they could reach a common position that would cover the measures agreed by the euro-zone members and the different national responses, particularly that of Britain.

Another key issue for the summit will be relations with Russia, which have been hit by the situation surrounding the Georgian breakaway republics of South Ossetia and Abkhazia.

Barroso said it would be a 'mistake' to continue the freeze in dialogue with Russia, and it was in the interest of both sides to discuss a new strategic partnership agreement.

Speaking to journalists Tuesday after a meeting in Brussels with Georgian President Mikheil Saakashvili, Barroso said the partnership 'is not a gift we are making to Russia. It is something we believe could be in the interests of both parties, and certainly in the interests of the European Union.'

The EU suspended talks with Russia - already delayed over objections from Poland and Lithuania - at an emergency summit Sep 1 to discuss the Georgian situation.

Following a Georgian assault on South Ossetia in early August, Russia launched a five-day military operation to 'force Georgia to peace' and on Aug 28 it recognized South Ossetia and another disputed Georgian region, Abkhazia, as independent states.

EU monitors have since replaced Russian troops in buffer zones adjacent to the two republics, but there are disagreements between all sides, who meet Wednesday in Geneva, on whether commitments under an EU-brokered peace deal have been met.

A European diplomatic source told RIA Novosti that objections to restarting talks on the cooperation pact were led by the Baltic States, Poland, the Czech Republic, Austria and Sweden.