Brussels  - The French presidency of the European Union agreed Tuesday to scale back its ambitious 11-point plan on reforming global capitalism amid concerns that calls for a "global economic government" would encroach on national sovereignties.

The French proposal is meant to kickstart discussions on a common EU position ahead of a global financial summit due to take place in Washington on November 15.

At a preparatory meeting in Brussels, French Finance Minister Christine Lagarde said fellow EU ministers had shown "massive support" for the presidency's document, which outlines a series of key changes to the way global capitalism should be run.

However, the minister agreed to change the wording of a paragraph highlighting the need to "encourage an internationally coordinated response to the macroeconomic challenges to come."

Several fellow EU finance ministers had warned that such a wording could one day lead to the creation of a supranational structure charged with governing the world economy.

"There should be no suspicion that a European economic government is being established," said German Finance Minister Peer Steinbrueck.

"It is not our intention to have a global economic forum, let alone a global economic policy - that would be way too hard. The other points were generally agreed upon," retorted Lagarde.

The French plan calls for increased transparency in financial markets, the compulsory registration and monitoring of credit rating agencies, and new codes of conduct to deter top managers from taking "excessive" risks.

World leaders should also push for the global harmonization of accounting and bank capitalization rules and closer cooperation between national regulators.

And the International Monetary Fund should be given more powers and should in turn give a stronger voice to emerging and developing countries.

While there was broad agreement on the text being discussed in Brussels, differences remain. Britain and Sweden, for instance, have complained that it is "too detailed", while others say it is "not detailed enough.".

A separate concern involves the danger that the credit crisis could lead to a wave of excessive regulations.

"The first, and perhaps most important point is that we really need to get a fully functional fire department," said Swedish Finance Minister Anders Borg. "Eventually, we can have a discussion on the fire-safety norms for buildings."

While acknowledging as much, Lagarde warned against leaving key sectors of the financial markets out of the regulatory noose.

"We should not over-regulate, but clearly we also want to make sure we don't leave loopholes or dark holes in the regulations, where either products, players or territories would be left completely without such regulation."

Britain and the Netherlands, meanwhile, have also submitted their own plans on how to avoid future credit crunches.

The discussions were set to continue on Friday, when EU leaders will hold an extraordinary summit ahead of the G20 meeting.

In Washington, the EU will be represented by the European members of the Group of Eight (G8) - Britain, France, Germany and Italy.

Spain said it was disappointed at not being invited.

But Lagarde said Tuesday that the discussions in Brussels were meant to "gather as many points of view, proposals, amendments as possible."

At their meeting in Brussels, EU finance ministers also formally approved a 6.5-billion-euro (8.2-billion-dollar) loan to help Hungary out of its current balance-of-payments difficulties.

Ministers also met representatives of sovereign wealth funds from Norway, Qatar and Abu Dhabi, and with their colleagues from Iceland, Norway, Switzerland and Liechtenstein. (dpa)