Brussels - European Union leaders are meeting in Brussels on Friday to hammer out a common stance on pursuing a rapid overhaul of the world financial system in the wake of the recent round of global market turmoil.

During their lunchtime summit in Brussels, leaders are to discuss a revised paper submitted by the French presidency of the EU, which sets out five guidelines designed to avoid a new credit crunch.

In particular, the paper 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 controversial geared funds 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 EU proposals are to be presented at a November 15 meeting in Washington of the Group of 20 government chiefs and presidents, which has been called to consider ways of revamping key parts of the international financial structure.

Moreover, 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 shape as a result of the turbulence which engulfed world markets in recent months.

But while Europe has successfully taken the international lead in forging plans to meet the challenges unleashed by the global financial upheaval, signs of divisions have began to emerge between EU leaders.

Indeed, ahead of Friday's meeting in Brussels the EU leaders have been struggling to strike a balance between strengthening international bodies or reasserting the supervisory role of their national authorities.

A previous French text had to be redrafted after Germany and others complained that it suggested the creation of a "global economic government."

Already diplomats warn that EU leaders will be meeting on an informal basis, meaning no binding decisions will be made. (dpa)