Euro, shares dip as G7 pushes for action on Europe
By Richard Hubbard
LONDON (Reuters) - European shares and the euro eased on Tuesday as finance chiefs from the world's major nations pushed Europe for faster action on its growing debt crisis and Spain said the euro zone's fourth biggest economy was being shut out of credit markets.
The single currency, which early in the day hit a one-week high of $1.2543, fell 0.5 percent to $1.2440 when Spain's Treasury Minister signaled his concern over high borrowing costs just two days before a planned debt auction.
Commodities like oil followed the euro lower, but gold gained on a view that the worsening economic outlook may prompt further easing measures from the world's major central banks. U.S. stock index futures indicated Wall Street may open higher .N.
Spain's funding problems, and the threat they hold for the rest of the world, will be discussed in a teleconference by finance ministers and central bankers from the United States, Canada, Japan, Britain, Germany, France and Italy (the G7), which began at 1100 GMT on Tuesday.
"The G7 is going to put a lot of pressure on Europe to accelerate the treatment of the banking crisis, which means to increase the pressure on the Spanish Government," said Eric Chaney, Chief Economist for the AXA Group.
"I think the Spanish Government, even though it will not attend this meeting, will hear a lot coming from the G7, and the message would be very simple: You need to borrow money from the European (bailout) fund. Please do it," he said.
French Foreign Minister Laurent Fabius said Europe needed to find a solution to the Spanish banking crisis that did not add to Madrid's already heavy budget deficit, reiterating Paris's support for one proposal to help solve the current crisis - a full European banking union.
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