G20 Leaders Talk Eurozone Crisis

Posted June 19th, 2012 at 12:50 pm (UTC-5)
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U.S. President Barack Obama is spending the last day of the G20 summit in Mexico Tuesday in further talks with his counterparts about the ongoing eurozone debt crisis.

French President Francois Hollande was quoted by the Reuters news agency Tuesday as saying he and German Chancellor Angela Merkel know that Europe must come up with its own response to the crisis rather than seek solutions from the outside. He said the International Monetary Fund is not there to “backstop” the eurozone, even though it has done that for some countries, such as Greece.

On the first day of the Group of 20 talks Monday, President Obama joined those putting pressure on Europe to advance a plan to address the crisis.

“A lot of attention has been centered on Europe. Now is the time, as we have discussed, to make sure that all of us join to do what is necessary to stabilize the world financial system.”

G20 leaders issued a preliminary statement Monday declaring they were ready to launch a coordinated effort to promote economic growth. The position runs counter to the German-led austerity drive, which has angered Greece and other debt-plagued nations that have had to impose harsh spending restrictions as a condition for financial rescue.

Despite the apparent progress, Aaron Task, host of Yahoo! Finance's news webcast The Daily Ticker, says his expectations are low for the summit will accomplish much.

“Those G20 Summit meetings, they come together, there's a lot of pomp and circumstance, there's rarely anything that ever really comes out of it. It's a European problem, the European policy makers are having a hard enough time getting themselves together, and then you add in the other members of the G20, and things get watered down, so I doubt it frankly.”

President Obama is also using his time in Mexico for bilateral talks– with Russian President Vladimir Putin on Monday and Chinese President Hu Jintao on Tuesday before he heads back to Washington.

Mr. Obama also held talks with Chancellor Merkel Monday. The White House said Mr. Obama was “encouraged” by his discussions with Ms. Merkel about the steps European leaders were taking to address the sovereign debt crisis. The U.S. president has blamed the eurozone debt crisis for the continuing high unemployment rate in the United States, which could hurt his re-election efforts this November.

China has pledged to contribute $43 billion to the International Monetary Fund's emergency bailout fund, along with pledges of $10 billion each from Brazil, Russia and India. The contributions from the four emerging nations boosts the IMF's bailout fund to $456 billion.

Recent gatherings of the G20, with leaders from the world's leading economies, have been consumed with details of the European financial crisis, amid fears that an economic collapse on the continent would quickly spread across the globe.

But representatives of some non-governmental agencies are also pressing the heads of state to not overlook the plight of poor, non-industrialized countries, where most of the world's neediest people live.