G20 summit: US 'encouraged' by eurozone plans

US President Obama said he expected Europe would be able to solve its problems

US President Barack Obama has said he is encouraged by European leaders' plans to tackle the eurozone crisis, as the G20 summit in Mexico ends.

In a final communique, world leaders said they would take "all necessary measures" to protect the euro area.

Leaders said they welcomed Spain's plans to recapitalise its banks, according to the communique.

The talks were being held as Greece seeks to form a coalition government and Spain's borrowing costs soared.

Speaking to reporters at the end of the summit, President Obama said that European leaders recognised that "bold and decisive" action was needed to address Europe's debt crisis.

Start Quote

Euro Area members of the G20 will take all necessary measures to safeguard the integrity and stability of the area”

End Quote G20 leaders' joint statement

"What I have heard from European leaders during these discussions, they understand the stakes, they understand why it's important for them to take bold and decisive action, and I am confident they can meet those tests," he said.

President Obama said that while there was no "silver bullet" to solve Europe's crisis, "each step points to the fact that Europe is moving towards further integration rather than break-up".

"I am confident that over the next several weeks, Europe will paint a picture of where we need to go," he added.

'Concrete steps'

As the summit came to a close the European leaders pledged to maintain stability in the eurozone and to work with the next Greek government towards reform and sustainability.

"Euro area members of the G20 will take all necessary measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks," the joint statement said.

"We support the intention to consider concrete steps towards a more integrated financial architecture," it continued.

"The European Union members of the G20 are determined to move forward expeditiously on measures to support growth".

But German Chancellor Angela Merkel stressed that Greece must hold up its end of the deal.

"It's obvious that the reforms that were agreed in the past are the right steps and that they therefore must be implemented," Mrs Merkel told reporters.

Start Quote

Europe is trapped. It understands that an entirely different eurozone and European Union may be needed to save its currency but it shies away from a 'big leap'”

End Quote

She added that world leaders had "very balanced" talks on growth.

"We need the right mix of budget consolidation... and at the same time efforts for growth."

In the closing discussions of the summit, leaders also agreed not to introduce new protectionist measures until 2014.

But Russian President Vladimir Putin said that the imposition of trade barriers could be a vital tool in protecting Russian jobs.

Meanwhile, the "Brics" economies (Brazil, Russia, India, China and South Africa) also pledged to increase their contributions to the International Monetary Fund (IMF) - which has been seeking to boost its finances to prevent any future financial crisis.

The five Brics nations all offered to contribute $10bn (£6.4bn) to the IMF each in exchange for voting reforms that would give them greater influence in the organisation.

China also pledged $43bn (£27bn) to the IMF's crisis intervention fund, which has almost doubled to $456bn (£366bn).

The BBC's diplomatic correspondent Bridget Kendall, at the Los Cabos summit, says the offer of billions of dollars from the developing economies is perhaps the most tangible result of the two-day-long talks.

The funds, which would be released by the IMF if the eurozone crisis spreads, are a sign of support but also indicate how fragile many fear the economic situation in Europe to be, our correspondent adds.

G20: How their economies are faring

Country Growth (% GDP change, 2010-11) Unemployment (% 2011) External debt (% GDP, end of 2011)

Source: Principal Global Indicators

Argentina flag

Argentina

8.9

7.5

7.6

Australia flag

Australia

2.2

5.1

86.6

Brazil flag

Brazil

2.7

6

17.2

Canada flag

Canada

2.4

7.5

70.2

China flag

China - mainland

n/a

4.1

n/a

EU flag

European Union*

1.5

10.1**

120.0

French flag

France

1.7

9.3

191.2

Germany flag

Germany

3

6.5

159.4

India flag

India

6.9

n/a

17.2***

Indonesia flag

Indonesia

6.5

6.6

26.5

Italy flag

Italy

0.4

8.4

115.1

Japan flag

Japan

-0.7

4.6

52

Mexico flag

Mexico

3.9

5.2

26.1

Russia flag

Russia

4.3

6.6

27.7

Saudi Arabia flag

Saudi Arabia

6.8

n/a

n/a

South Africa flag

South Africa

3.3

24.9

29.4

South Korea flag

South Korea

3.6

3.4

34.9

Turkey flag

Turkey

8.5

9.8

42.7

UK flag

UK

0.9

8.1

421.9

US flag

US

1.7

9.0

98.2

* Euro area only, ** 2010 figs, *** Q3 2011. Note: External debt refers to debt owed to creditors outside the country. Countries with active financial sectors, such as the UK, tend to have large amounts of external debt.

Are you from a Brics country? What are your views on the economic crisis in the EU? Please send us your comments using the form below.

If you are happy to be contacted by a BBC journalist please leave a telephone number that we can contact you on. In some cases a selection of your comments will be published, displaying your name as you provide it and location, unless you state otherwise. Your contact details will never be published. When sending us pictures, video or eyewitness accounts at no time should you endanger yourself or others, take any unnecessary risks or infringe any laws. Please ensure you have read the terms and conditions.

Terms and conditions

More on This Story

Global Economy

From other news sites

More Business stories

RSS

Features

  • John CurticeScotland decides

    Referendum race 'may have got tighter'


  • RihannaCloud caution

    After celebrity leaks, what can you do to safeguard your photos?


  • Cesc FabregasFair price?

    Have some football clubs overpaid for their new players?


  • Woman and hairdryerBlow back

    Would banning high-power appliances actually save energy?


  • Rack of lambFavourite feast

    Is the UK unusually fond of lamb and potatoes?


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.