Cowen and Sarkozy discuss Lisbon and financial crisis

Taoiseach Brian Cowen and French President Nicolas Sarkozy have met in Paris where they discussed the financial crisis as well…

Taoiseach Brian Cowen and French President Nicolas Sarkozy have met in Paris where they discussed the financial crisis as well as the fallout from the Lisbon treaty rejection.

Mr Cowen said after the meeting that Mr Sarkozy supported the Government’s decision to guarantee deposits in Irish banks.

"Yes, I think the president understands precisely why the Irish government had to act and the circumstances in which we found ourselves. There is a full understanding of the Irish government's position," said Mr Cowen.

The Taoiseach was accompanied by the Minister for Foreign Affairs Micheál Martin. Mr Martin's French counterpart, Bernard Kouchner, also attended the meeting.

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The meeting follows on from Mr Sarkozy’s visit to Dublin in July when the two leaders agreed to meet again in advance of this month’s European Council meeting on October 15th and 16th.

Mr Cowen said he would present research on the Irish No vote to the Lisbon treaty at the summit.

Mr Sarkozy will host a meeting of senior EU officials on Saturday to work out a response to the financial crisis which has spread from the United States to the European banking system, officials said.

"We have a preparatory meeting for the broader G8 meeting on Saturday afternoon in Paris," Luxembourg Prime Minister and Eurogroup Chairman Jean-Claude Juncker said.

EU leaders will also hold a summit in Brussels on October 15th where they are expected to discuss improving regulations in the light of the crisis.

Mr Sarkozy's domestic popularity has been low in recent months, howver, and he was initially criticised by opposition politicians for his slow reaction to the financial crisis, which accelerated dramatically in mid-September, throwing Wall Street banks into turmoil.

The crisis has put pressure on EU governments to produce a master plan to combat the growing confidence crisis and head off further banking meltdowns.

"There is an ad-hocism in the solutions that we are proposing even if several of us are involved," Mr Juncker said. "I think we need to systemise the European response."

He said European banks were more solid than their U.S. counterparts but that all EU governments were ready to intervene to support failing banks.