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G20 tells euro zone to get to grips with debt crisis

G20 tells euro zone to get to grips with debt crisis
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Get on top of your debt crisis by this time next week.

That is the stark message sent by the world’s leading economies to the euro zone, at the end of crucial talks in Paris.

G20 finance chiefs said the IMF must have adequate resources but stressed it was up to an EU summit next weekend to take decisive action.

“We are prepared to continue to support an effective strategy in Europe, with the IMF,” said US Treasury Secretary Timothy Geithner. “And if there is a compelling case for more IMF resources, more use of the existing resources of the IMF, alongside a more effective substantial European strategy, then we will be supportive of that.”

IMF boss Christine Lagarde highlighted fears of a knock-on effect that could hit emerging economies.

“If anything, the situation is more likely to have worsened than to have improved over the last three weeks and if markets have straightened up a bit in the last few days, certainly the overall economic situation has not improved,” she said. “We heard loud and clear that the emerging markets in particular were very concerned about the risk of contagion from advanced economies to emerging markets and to low income countries.”

French Finance Minister Francois Baroin promised that the EU summit on October 23 would be decisive. Now actions as well as words are needed with the pressure on and time running out.