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EU raises stakes with €7.2bn in climate change aid

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Summit addresses funding for climate action and financial reform

European leaders have pledged a total of €7.2bn over the next three years to help poorer nations cope with global warming, hoping to boost support for an agreement in Copenhagen.

Besides wrangling over curbs on greenhouse gas emissions, negotiators at the UN conference in the Danish capital are struggling to decide who will foot the bill for climate adaptation projects in the developing world.

At a meeting in October, EU leaders agreed that international public funding of about €5-7bn would be needed each year up to 2013 - and more in the long term. They also agreed to contribute to the global pot if other countries followed suit.

Today's pledge, following all-night negotiations, increases pressure on other major industrialised powers to come forward with comparable commitments. The aid would include funding to help protect coasts, preserve forests, modify crops and switch from fossil-fuel to low-carbon energy.

"I'm delighted that we have achieved an ambitious figure on fast-start financing that exceeds what could be expected from the European Union," president Barroso said.

"We hope now that others will match our figures and ambitions. Finance is key to getting this deal done."

EU leaders also agreed to create three European watchdogs to supervise banks, insurers and exchanges. Parliament must still approve the new system, aimed at preventing another financial crisis.

They endorsed a joint approach on bankers' pay, and changes to EU laws on the amount of cash and other liquid assets that banks are required to hold. The goal is to ensure banks have enough reserves to buffer them during downturns and to rein in the kind of reckless risk-taking that set off the financial crisis.

The council also adopted a new law-and-order agenda for the next five years. The 'Stockholm programme' strengthens cooperation between member countries in areas including asylum, border controls and policing. It will replace the current 'Hague programme', which expires in December.

The summit, the first under the new Lisbon treaty, also touched on plans for invigorating the economy and addressed the situation in Afghanistan and the standoff with Iran over its nuclear programme.

Expressive "grave concern," EU leaders urged Iran to comply without delay with resolutions by the UN security council and the UN nuclear watchdog.