EU, U.S. to meet on crisis; U.S. prices flat

By Eddie Evans and Jeremy Gaunt

NEW YORK/LONDON (Reuters) - U.S. and European Union leaders agreed on Thursday to meet at the weekend to prepare for a global summit to overhaul the world's financial system, while fears of worldwide recession continued to rattle markets.

U.S. consumer prices were unexpectedly flat in September, and stock index futures pointed to a higher open on Wall Street on signs that the credit market was finally thawing.

In Europe, central banks renewed efforts to free up liquidity and unblock frozen lending, with further action from Switzerland, Britain and the European Central Bank.

French President Nicholas Sarkozy, currently representing the EU on the world stage, said at an EU summit in Brussels he would meet U.S. President George W. Bush on Saturday.

"If we can bring coordinated answers to the financial crisis, can we not bring coordinated answers to the economic crisis?" Sarkozy asked.

British Prime Minister Gordon Brown said EU leaders had agreed on the need to reform the international financial system as the world faced its worst financial crisis in 80 years.

Underlining the problems, U.S. investment bank Merrill Lynch reported net write-downs of $5.7 billion from toxic assets and Citigroup reported a quarterly net loss of $2.8 billion.

Japan's prime minister, Taro Aso, said Washington may need to push yet more cash into its banks to restore investor confidence, shattered by a crisis that began with a U.S. housing market collapse and now threatens economies worldwide.