Europe under pressure as G20 countries meet

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euro sovereign debt default crisis

European officials on Sunday summarised the plan of action discussed at a meeting of central bankers from G20 economies and finance ministers in Paris. At a time when the continent?s economic distress is threatening the world economy and jolting global financial markets, governments were asked to complete the plan before their Oct. 23 summit in Brussels to announce their 440 billion-euro ($611 billion) bailout fund.

Bank of Canada Governor Mark Carney said that ?some of what is being considered, if fully implemented, would be sufficient in our opinion.? US Treasury Secretary Timothy F. Geithner told the press in Paris that ?The plan has the right elements.?

Brazilian Finance Minister Guido Mantega told the press yesterday that ?The world is waiting for solutions to the European problems that have now become the world?s problems,? in Paris. ?I am more optimistic. They are advancing.?

Policy makers are still not sure whether the Washington-based lender needs a fillip of cash to help crisis or it would be IMF that has to play its role, yet again.

Mr. Geithner said: “The US would back more money for the IMF only if a ?compelling case? was made as its current $390 billion war chest is ?very, very substantial.? Geithner added that ?IMF has a substantial arsenal of financial resources, and we would support further use of those existing resources to supplement a comprehensive, well-designed European strategy alongside a more substantial commitment of European resources,?

World is expecting a direct plan to tackle the situation and there is a lot of pressure on European leaders to deliver a solution or watch the euro zone economy to move backwards,? Next weekend ?is the moment people are expecting something quite impressive.? U.K. Chancellor of the Exchequer George Osborne told the media.

South African Finance Minister Pravin Gordhan said Europe had been “behind the curve” and that solutions were needed in time for the summit of G20 leaders on November 3 and 4 in Cannes.

“We are looking for assurances from our European colleagues that by the time the summit of the G20 takes place, we will have a clear message that will create confidence,” he said.

He also warned the resources of the Europe’s rescue fund and International Monetary Fund, the European Financial Stability Facility (EFSF), may be “inadequate” if debt disorder may spreads further.

German Chancellor Angela Merkel, criticize the role of US and other nations, saying ”non-eurozone countries wanting rapid action should drop their opposition to a financial transaction tax, “It is not possible that those outside the eurozone who are asking Europe to act are at the same time refusing a financial transaction tax,”

According to analysts ” they better come up with something good because then Italy, Portugal and Ireland are in line to announce their bankruptcy”

“What you need is the clear commitment by the governments, that they will do what is necessary to hold this together and put as much resources behind this as is necessary,” Geithner told CNBC television from Paris.

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