Greek Crisis: G20 Leaders Agree to Boost IMF Resources

NEW YORK | Friday, November 4th, 2011 9:54pm EDT

G20 leaders in Cannes have ended their summit with an agreement to increase the resources of the International Monetary Fund to help stem the European debt crisis.

Greek Crisis G20 Leaders Agree to Boost IMF Resources 011

After two days of talks on stabilising the world economy, leaders at the G20 summit in the south of France insist they have made progress. Photo: France Diplomatie/Flickr

EU President Herman Van Rompuy said the decision was reached Friday at the G20 summit in the French resort of Cannes. But the way of the additional help for the IMF still remains uncertain while some of the world’s largest economies, such as the U.S. and China, are facing their own economic difficulties.

Closing press conference, Nicolas Sarkozy, said, “We will fight to defend Europe and the euro”.

He added the G20 leaders had finally agreed to boost the resources of the International Monetary Fund) and would agree on additional steps by February.

UK Prime Minister David Cameron had disputed the suggestion, stating that there had not been the promised agreements.

“There are agreements on both the eurozone and the IMF,” he said.

However, he added, “The problem is not that there isn’t a deal – the problem is that not all of the details… have been put in place.”

The world’s biggest economies’ leaders were focusing on strengthening the IMF as they were trying to find ways to help Europe cope with its continuing debt crisis without worsening their own money troubles.

European and non-European countries disagree about how to better use the IMF — the institution that was set up as the lender of last resort for struggling governments after World War II — to help.

China, Russia and Brazil quickly had insisted on channeling through the IMF any investment from their side. That would ensure that their loans come linked to strict economic conditions and could also give them more influence within the fund.

But starting from the first day of the summit, much attention was sticked on Greece, where Prime Minister George Papandreou faces a confidence vote in Parliament.

Jose Manuel Barroso said that he hoped Greece would stay in the euro, but added that the country would need to take on the responsibilities that come with membership.

Prime minister of Greece, George Papandreou, is expected to face a confidence vote in parliament late on Friday.

Opposition politicians and some members of his government have already called for his resignation, following his announcement of a referendum on the austerity measures.

In case Papandreou loses the confidence vote, Greece will have nothing to do but hold new elections, which may further delay the implementation of a Greek bailout package.

Eurozone leaders have already withheld 8bn euros ($11bn; £7bn) of fresh rescue loans to Greece and there suppose that further delays are not possible because the government can run out of cash and even default on its payments.

So, the results of the summit are the next. The EU leaders:

Have achieved an agreement to support the IMF and provide it with more money if necessary

Welcomed Italy’s invitation to the IMF to monitor its economic reforms

Appealed to countries with strong public finances to take steps to boost domestic demand

Accepted the eurozone’s plans to restore confidence and financial stability

Set up a task force on youth employment

[Via BBC, TimeWorld and CBSNews]

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