G20 ministers meeting to discuss eurozone debt crisis

French Finance Minister Francois Baroin (left), US Treasury Secretary Timothy Geithner, and Chancellor George Osborne at a previous meeting earlier this month The G20 finance ministers will have much to discuss

Finance ministers from the G20 group of nations are meeting in Paris to continue efforts to find a solution to the debt crisis in the eurozone.

While Greece remains the central focus, fears remain that the crisis could spread to other highly indebted eurozone countries such as Spain and Italy, and exposed European banks.

Greece needs its next bailout loan next month to avoid defaulting on its debt.

Spain was hit by a further credit rating cut on Thursday.

Standard & Poor's reduced Spain's long term rating by one notch, citing weak growth and high levels of private-sector debt.

It came a week after fellow credit rating agency Fitch also cut Spain's rating.

On Thursday, Fitch also downgraded the creditworthiness of UK banks Lloyds and RBS, and also Switzerland's UBS.

Funding issues

The euro rose as high as $1.3828 against the dollar in Friday trading, on optimism about the meeting of G20 finance ministers.

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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”

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

These are expected to include an agreement on 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.

Prior to the meeting, South Africa's Finance Minister Pravin Gordhan warned that International Monetary Fund (IMF) and EU resources may be "inadequate" if the eurozone debt crisis worsened.

US Treasury Secretary Timothy Geithner disagreed, saying 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 also said the G20 was looking for a "clear commitment" from Europe to deal with the debt crisis.

He 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.

Mr Geithner is expected to make a fresh call at the G20 meeting for China to allow its currency, the yuan, to trade freely.

Washington has long accused Beijing of keeping the yuan undervalued to make Chinese exports artificially competitive.

Greek focus

Athens is now likely to get its next loan instalment 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.

Greece's next 8bn euros ($11bn; £7bn) payment of EU and IMF funds has been delayed since the troika inspectors called off earlier inspections in Athens at the start of September.

However, inspections resumed after the Greek government pledged further austerity moves, despite widespread protests.

Protests against spending cuts are also continuing in Spain.


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  • rate this

    Comment number 32.

    I've always been a staunch capitalist, but am starting to lose my faith in our current system. The one thing that strikes me is absolutely nobody seems to, definitively, know how to correct the current problems. It seems really bizarre that we continue with a model which is ruining peoples lives and is totally unfit for purpose. Communism sucks too, but surely there must be another way to go!!!

  • rate this

    Comment number 21.

    And so the saga goes on.
    This is like watching an expensive version of musical chairs.
    Only instead of waiting for the music to stop it's a case of waiting till the implosion takes place. Who ever is left at this point with an objection to a rescue plan is the one who will get the blame for the Euro's demise and all the brown stuff that goes with it.
    It's politicians being politicians aka crooks.

  • rate this

    Comment number 13.

    Greece is just a symptom that banks are unable/unwilling/underhandedly calculating risk as are the rating agencies.

    Given that risk seems to be something that cannot be calcuated then the price of goods is under question and due to the volume of those goods the currency it has been paid for in.

    We are still in a situation where the banks are loaning money for the wrong reasons.


  • rate this

    Comment number 10.

    Mess what mess Greece are laughing, overspend then have your loan payment halved and the dept being paid to banks by other countries. Great idea why dont we all do that. Have to try that with my bank borrow a couple of million live the good life and default. Yea wake up all

  • rate this

    Comment number 8.

    Of course they won’t come up with a solution yet, governments are using this situation to jockey for position ready for how things are after this immediate crisis is over. RIP the Euro and the Eurozone, best seen as the costly mistake that many ordinary people predicated it would be.


Comments 5 of 8


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