G20 pushes for extra steps from Europe on crisis

Fri Jan 20, 2012 8:18pm EST
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By Krista Hughes and Luis Rojas

MEXICO CITY (Reuters) - Group of 20 nations agreed to push Europe to take extra steps to resolve the debt crisis on Friday as they inch toward a deal to boost the International Monetary Fund's firepower.

Mexico Deputy Finance Minister Gerardo Rodriguez said talks between G20 officials in Mexico City on Thursday and Friday were a "good starting point" but no specifics were agreed on how to shore up the Washington-based lender.

"I think there is a good willingness for dialogue with all the countries, European, non-European, the United States, Brazil," he said at a news conference at the end of the two-day meeting, the first of Mexico's G20 presidency.

"There is a recognition of the measures Europe has taken. But it's also clear that more needs to be done."

A G20 source present at the meetings said there was agreement that Europe had to take other steps as a matter or urgency and meanwhile the IMF would canvass its members about how much each would be prepared to contribute.

The IMF is seeking to more than double its war chest by raising $600 billion for new lending, and the source said there was "broad agreement" to do this via bilateral loans. But the plan faces roadblocks from the United States and other countries including Canada and Japan, which insist that Europe must first do more to help itself.

Sources involved in the G20 talks said one option could be to lift the combined capacity of the euro zone's permanent and temporary bailout funds from the current 500 billion euros.

Rodriguez said there was an "intense discussion" about reforms needed in the light of a fragile global economic environment.   Continued...