G20 finance ministers in day two of eurozone talks Skip to main content

G20 finance ministers in day two of eurozone talks

IMF chief Christine Lagarde (L), France's Finance Minister Francois Baroin (C) and France's Central Bank head Christian Noyer (R) on the first day of the G20 meeting of Finance Ministers and Central Bank Governors in Paris October 14, 2011 Analysts say any major decisions are unlikely to be announced until an EU meeting next week
Finance ministers of the G20 group of nations are meeting in Paris to continue talks on solving the eurozone debt crisis.

One question is whether the International Monetary Fund should increase in size as part of a broader global response to the situation.

However the idea has been met with some resistance by the US, reports say.
On Friday, US President Barack Obama and German Chancellor Angela Merkel spoke by phone to discuss the crisis.

US officials said Mr Obama had warned of the risks posed to the US economy, and also discussed preparations for a G20 summit in Cannes scheduled for early next month.
'Clearly moving'
 
Talks are expected to remain focused on Greece, amid fears that the crisis could spread to other highly indebted eurozone countries such as Spain and Italy, and exposed European banks.

One G20 source told Reuters that a proposal to inject $350bn (£221bn) into the IMF had been backed by some emerging market policymakers.

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It is just possible that the Greek people will have their say, that they will simply refuse to go along with austerity plans demanded by outsiders, their creditors”
However, US Treasury Secretary Timothy Geithner said he believed that both the IMF and EU already had sufficient funds.

He said: "As we look at the world today, the IMF has very substantial, uncommitted, available financial resources.

"Of course, Europe as a whole has resources available to help with the financial problems.
"The problems that they are facing there in Europe are complicated to solve, but well within the resources that Europe has."

Mr Geithner told CNBC television from Paris: "What you need is the clear commitment by the governments, that they will do what is necessary to hold this together and put as much resources behind this as is necessary."

He said Europe "is clearly moving" to deal with the crisis.
'Enforced immediately'
 
Ministers from outside the eurozone have been pressing European leaders to take decisive action to solve the crisis.

However, analysts say that any major decisions will not be announced until the meeting of European Union (EU) leaders on 23 October.

They are expected to include increasing the funding and powers of the European Financial Stability Facility (EFSF), the fund set up to help national governments in financial difficulty.
The European Commission President, Jose-Manuel Barroso, said on Friday that any decisions taken on banks or on the eurozone's EFSF rescue fund at that meeting should take effect immediately.

Mr Barroso said: "Any decision should be enforced immediately, concerning the strengthening of the EFSF or concerning increased guarantees for our banks."

Measures to protect European banks with high levels of exposure to eurozone national debt are also expected to be decided by EU leaders.

Athens is now likely to get its next loan instalment - totaling 8bn euros ($11bn; £7bn) - in November after inspectors from the EU, International Monetary Fund (IMF) and European Central Bank said they had reached agreement with the Greek government on further austerity measures in the country.

The representatives from the so-called troika had been in Athens to check on whether the Greek government was carrying out sufficient spending cuts and tax raising measures.
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BBC

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