"We should encourage national regulators to cooperate and an early warning system may help prevent another major collapse of the banking system. However national regulators must not be dictated to by a supranational body.

We should ensure we do not muddy the waters of jurisdiction by giving the European Central Bank powers to intervene in the economies of non-Eurozone countries. It should work with the central banks of other non-eurozone countries to coordinate surveillance of the financial health of the EU as a whole.

The response to the financial crisis needs to be measured rather than over-radical. We must ensure that we create a framework that protects our industry as far as possible from future crises without damaging our competitiveness. A hair's breadth in the wrong direction will be the difference between overregulation that stifles our recovery and sound regulation that ensures it."

"The blanket two and a half per cent VAT cut in the UK has been largely ineffective in stimulating our economy, but governments should use the freedom to decide if a targeted VAT cut is the best option for their economies.

In the current parlous state of the British, European and World economies, this proposal gives EU member states an opportunity to work in concert to target major reductions in VAT, down to five per cent, on labour-intensive and local services such as renovation of homes, places of worship and of cultural importance. This will be much more effective than the across-the-board reduction of two and a half per cent.

The Council of Ministers should now speedily approve these plans so that governments have greater flexibility in applying VAT rates."