Brussels - French President Nicolas Sarkozy on Friday urged his European Union colleagues to agree on how to reform global finance amid strong resistance from Sweden and scepticism among several other member states.

"We have no choice other than to reach an agreement," Sarkozy said at the start of Friday's extraordinary EU summit. "For Europe to count, we must be united."

Sarkozy, whose country holds the rotating presidency of the EU until the end of the year, is hoping that a unified European position will put the 27-member bloc in the driving seat when Group of 20 leaders meet in Washington next week to discuss ways of avoiding a repeat of the current market turmoil.

In Washington, Europe will be represented by G8 members Britain, France, Germany and Italy. Spain and future EU presidents the Czech Republic are among those also seeking a seat at the November 15 gathering.

France has put on the table five guidelines designed to kickstart discussions.

But Swedish Prime Minister Fredrik Reinfeldt set the tone for what could turn out to be acrimonious talks in Brussels by voicing his "concern" at France's proposed solution to the financial crisis.

"We are very concerned that we are choosing the wrong road," Reinfeldt said. "We need a few good rules, and not a lot of fuzzy ones."

Reinfeld said Sweden enjoyed the backing of Britain, which has itself complained about the French proposals being "too detailed".

And while European Parliament President Hans-Gert Poettering said it would be "unusual" not to have different positions in a union representing nearly 500 million people, German Chancellor Angela Merkel expressed optimism that an agreement would be reached.

"Today, it's about reaching a unified position among the EU member states. And I believe that the chances are very good," Merkel said.

The French paper being discussed by leaders over lunch calls for strengthening the International Monetary Fund's (IMF) supervisory role and boosting funding for the Washington-based body with additional contributions.

It also proposes stepping up supervision of global rating agencies, harmonizing international accounting standards and ensuring that so-called "geared funds", which borrow money to make high-risk investments, fall under supervisory controls.

France also wants to force managers to avoid excessive risk-taking through a new code of conduct and to ensure that no financial product or territory, including tax havens, "escape regulation or supervision."

The debate in Brussels was expected to focus on how much regulation is needed, and whether such supervision should be handed over to international bodies or not.

"We don't need a global supervisory body. We need rules which have worldwide effects," Luxembourg Prime Minister Jean-Claude Juncker, the powerful chairman of the Eurogroup, an informal grouping of the 15 nations using the euro, told German radio ahead of the meeting.

According to European Commission President Jose Manuel Barroso, the EU faced a unique chance to lead the way in what he described as "a historic moment".

"This crisis has put the reform of the global financial system at the top of the agenda," Barroso said.

With the United States distracted by the presidential transition from George W Bush to Barack Obama, it has so far been left to the EU to try and re-write the rules of global finance.

And EU leaders want the Washington summit to produce a concrete timetable for an agreement to be presented at the next meeting of the Group of Eight leading industrial nations, scheduled for July in Sardinia, Italy.

Concrete proposals on how to reform global finance should be submitted "within 100 days" of the Washington meeting, diplomats in Brussels said.

The EU leaders' sense of urgency about hammering a quick fix comes amid evidence that a sharp economic downturn is taking root as a result of the turbulence which engulfed world markets in recent months. (dpa)