Financial markets must be subject to tight supervision and regulation, Dutch Prime Minister Jan Pieter Balkenende and German Chancellor Angela Merkel wrote in an article published on Thursday by Dutch daily NRC Handelsblad and several other European newspapers.

The two leaders called on the United States to regulate the financial sector more tightly than Washington has been willing to do up to now.

"It is indispensable that market forces are checked by a robust global framework of common values that sets clear limits to excessive and irresponsible action," Balkenende and Merkel wrote.

Balkenende is supporting the German and French side in the transatlantic debate on how to take on the economic crisis. The United States accuses the European Union of doing too little to stimulate the economy.

The opinion article comes ahead of the G20 summit in London next month, where Balkenende will attend as a member of the French delegation. EU heads of government are meeting in Brussels on Thursday and Friday to discuss the crisis.

"Apart from the discussion on how to bring our economies back onto a robust growth path, the key challenge we face in London is to build a new financial architecture that meets 21st century requirements," Merkel and Balkenende wrote.

"The credibility of the process hinges upon whether we deliver on our Washington commitments, e.g. that all financial markets, products and participants must be subject to appropriate oversight or regulation, without exception and regardless of their country of domicile," they said.

Although the last G20 meeting in Washington in November promised to strictly regulate the financial sector and associated services, there has been a lobby in Washington since then to prevent overly stringent rules.

The Dutch and German leaders wrote that besides regulating the private pools of capital, including hedge funds, the governments should "tackle tax havens and put an end to a bonus culture that leads to unacceptable risks."

In a separate letter to fellow EU leaders, Angela Merkel and French President Nicolas Sarkozy wrote that the EU should consider capping executive pay and adopt a sanctions mechanism for states that are uncooperative on regulation and transparency.

They deny that Europe is doing too little for the economy. "With a total of over 400 billion euro (around 3.3 percent of the EU's gross domestic product) ... Europe is at the vanguard in the fight against the recession," they said.

Source:Xinhua