G20 finance chiefs crank up pressure on euro zone

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G20 finance chiefs crank up pressure on euro zone

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The world’s leading economies are keeping up the heat on Europe to sort out its debt crisis, at a G20 finance chiefs’ meeting in Paris.

A draft communique contains what is described as “unusually direct language” in calling for more work to protect the world economy.

France and Germany have promised a plan to prevent contagion and shore up Europe’s banks.

Leading emerging market economies, known as the BRICS, are said to back a plan to boost the IMF.

“They don’t want the euro zone to fail. They don’t want the euro zone economy to move backwards. It’s in their interests to see a strong euro zone. So rather than them being forced to, I think it’s in their own national interest to try and come up – or help come up with a solution,” said Rob Carnell, Chief Economist with ING bank.

Euro zone policymakers are trying to fine tune a crisis resolution plan in time for next weekend’s crucial EU summit.

Moves are afoot to recapitalise banks, make Greece’s debt mountain more sustainable and the euro rescue fund more robust.

Although the IMF’s resources are one area of contention – its dominant shareholders believe it has enough – the onus is very much on Europe to sort itself out.