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Mexico G20 Summit: world leaders urge Europe to overcome eurozone crisis

World leaders meeting at a G20 summit in Mexico have urged Europe to take all necessary measures to overcome the eurozone debt crisis.

They voiced unease over what one top official described as “the single biggest risk for the world economy”.

But European Commission President Jose Manuel Barroso said “the challenges are not only European, they are global”.

Sunday’s victory of a pro-bailout party in the Greek election did not give stock markets the expected boost.

Antonis Samaras, the leader of the New Democracy party that narrowly won the poll, is holding urgent talks to form a coalition.

Antonis Samaras also reiterated that he would seek changes in the terms of a bailout agreement reached with the EU and IMF.

While Europe is clearly the big danger, there are also problems elsewhere in the world’s major advanced and emerging economies, starting with the two largest national economies, the US and China.

The slowdown in India is something else for the G20 to fret about at the Mexican resort of Los Cabos.

World leaders meeting at a G20 summit in Mexico have urged Europe to take all necessary measures to overcome the eurozone debt crisis

World leaders meeting at a G20 summit in Mexico have urged Europe to take all necessary measures to overcome the eurozone debt crisis

A draft of the statement to be released on Tuesday is expected to call for a coordinated global plan for job creation and growth, reports say.

And if growth weakens, the proposed document says, countries without heavy debts should “stand ready to co-ordinate and implement discretionary fiscal actions to support domestic demand”, according to Reuters.

In a separate development, China pledged $43 billion to the IMF’s crisis-fighting fund.

The move comes after a meeting of the Brics group of emerging economies – Brazil, Russia, India, China and South Africa. The five nations all offered to increase their contributions to the IMF in exchange for greater influence in the organization.

US President Barack Obama and Russian President Vladimir Putin held talks on the sidelines of the summit, urging an immediate end to violence in Syria.

In a joint statement following their first meeting since Vladimir Putin returned to the presidency, they said they shared a belief that Syrians should determine their own future.

The two countries have been at odds over how to resolve the crisis.

On Monday, many world leaders expressed alarm in Los Cabos at what they saw as a lack of progress in dealing with the eurozone crisis.


World Bank chief Robert Zoellick said: “We are waiting for Europe to tell us what it’s going to do.”

Meanwhile, Jose Angel Gurria, the Mexican head of the Organisation for Economic Co-operation and Development (OECD), said the crisis was “the single biggest risk for the world economy”.

Pascal Lamy, the head of the World Trade Organization (WTO), warned about the danger of contagion from the eurozone crisis.

He said that global volatility and uncertainty was fuelling a trend towards protectionism, which was not only stalling free trade but starting to reverse it.

Canadian Prime Minister Stephen Harper called on eurozone leaders to make structural changes to solve the debt crisis.

But Jose Manuel Barroso mounted a strong defense of the EU’s handling of the crisis so far.

“Frankly, we are not coming here to receive lessons in terms of democracy or in terms of how to handle the economy,” he told reporters.

He added that he expected G20 leaders to “speak very clearly in favor of the approach the EU is following”.

Meanwhile, Russian President Vladimir Putin called for rules to allow protectionism for countries facing a financial crisis.

“It is time to stop pretending and come to an honest agreement on the acceptable level of protectionist measures that governments can take to protect jobs in times of global crisis,” he said.

“This is particularly important for Russia as our country will join the WTO this year and we intend to take an active part in the discussions on the future rules for global trade.”

US President Barack Obama had earlier talked about the importance of avoiding protectionism, which is the process of making imports more expensive to protect domestic jobs.

 

Diane is a perfectionist. She enjoys searching the internet for the hottest events from around the world and writing an article about it. The details matter to her, so she makes sure the information is easy to read and understand. She likes traveling and history, especially ancient history. Being a very sociable person she has a blast having barbeque with family and friends.