President of the Party of European Socialists (PES) Poul Nyrup Rasmussen Wednesday called for a three-pronged European Union strategy for the upcoming G20 summit in Pittsburgh, the United States.

The EU should adopt a three-pronged strategy for the G20 summit, he said in a statement released one day ahead of an extraordinary EU summit, which is designed to coordinate EU positions for the G20 meeting, to be held next week.

The first strategy is to reach an agreement to close all deficiencies and loopholes in financial regulation, he said.

The second is to impose a global financial transaction tax and the third is to fix a coordinated "entry strategy" into the labor market to fight mass unemployment.

"Finance executives are already going back to business as usual. If the EU doesn't commit to closing all loopholes, we will end up being a source of regulatory arbitrage the result will be a total loss of credibility at the G20," he said of the first strategy.

On the proposal for a global financial transaction tax, Rasmussen said a realistic proposal was already on the table for Europe's heads of government to consider, referring to a "workable proposal for a global financial transaction tax at the G20" made by German Foreign Minister Frank-Walter Steinmeier and Finance Minister Peer Steinbrueck.

"It's right that the financial markets should pay their fair share of the bailouts and recovery efforts," said the Dane, "Citizens shouldn't have to foot the bill."

He said the transaction tax "is now needed to finance long-term investments in the real economy."

Rasmussen slapped at conservative European calls for an exit strategy at the G20 summit.

"(Swedish Prime Minister Fredrik) Reinfeldt and (German Chancellor Angela) Merkel's push for an exit strategy at the G20 is just too early and will undermine hopes of a strong recovery for growth and jobs," he stated.

"Only 0.1 percent GDP of the stimulus packages has been directly aimed at the labor market," he noted, adding that Europe's millions of unemployed want a coordinated entry strategy into the labor market in the EU and at the G20.

"That's the only way to assure the recovery," he concluded.

EU countries divided over whether or when to roll out an exit strategy, or stopping pumping money into the stagnated economy, to put public finance in order.

Some insist that the 27-nation bloc or the world community should continue to stimulate the frail economy, while others say that it's time to stop doing so mindful of a dire public finance would trigger inflation.

(Xinhua News Agency September 17, 2009)