Eurozone Debt Crisis Focus of G20 Summit

Posted November 3rd, 2011 at 1:55 pm (UTC-5)
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Leaders of the world's leading economies met Thursday in the French resort city of Cannes to discuss global economic problems, with the summit dominated by the European debt crisis and questions about a Greek bailout deal.

The summit host, French President Nicolas Sarkozy, welcomed news from Greece that some members of the political opposition there were supporting the latest international rescue plan and Greek Prime Minister George Papandreou was backing away from a proposed referendum on the deal.

Mr. Sarkozy said the common message from the summit was that Europe needed to implement something “credible, ambitious and fast” to avoid default by the continent's weaker economies. He called the common euro currency the “beating heart of Europe” and added, “we cannot allow the eurozone to break up.”

The European Union agreed to a plan last week to forgive $140 billion in Greek debt and strengthen a bailout fund in exchange for more austerity measures in Greece. That plan came into question on Monday when Mr. Papandreou called for a referendum in Greece – where the austerity measures are highly unpopular. He said Greece's future participation in Europe's common currency was at stake in the vote.

In an emergency meeting Wednesday ahead of the G20 summit, President Sarkozy and German Chancellor Angela Merkel said Greece would not receive “one more cent” of rescue loans unless it abides by the terms of the economic bailout package reached last week.

U.S. President Barack Obama met separately with Chancellor Merkel and President Sarkozy – who lead Europe's strongest economies – before Thursday's official start of the Group of 20 summit in Cannes.

President Obama said the European Union has taken some “important steps” to address its debt problems, and said he hopes the heads of the world's leading developed and developing countries can “flesh out” details of a comprehensive strategy to resolve the crisis.

The bailout agreement reached last week would forgive $140 billion in money owed by Greece to private banks and strengthen a European bailout fund for Greece and other countries with troubled economies. It had been been hailed as a crucial breakthrough in the efforts to solve the two-year-old European sovereign debt crisis.