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G20 Summit: World Leaders Fail To Find Solution To Eurozone Crisis

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G20 SUMMIT
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World leaders have drawn a blank in their efforts to resolve the eurozone crisis, as the G20 summit ended with no agreement on crucial measures to shore up ailing economies.

In developments which did nothing to boost market confidence, the Group of 20 leading economies failed to thrash out a detailed plan to stabilise the single currency or to boost the International Monetary Fund's ability to respond to emergencies.

Prime Minister David Cameron acknowledged that the ongoing uncertainty in the eurozone was having a "chilling" effect on the British economy. And he warned squabbling eurozone leaders that "the world can't wait" for them to finalise plans to bail out Greece, recapitalise banks and erect a £870 billion "firewall" to protect the single currency.

Strong-arm tactics from French president Nicolas Sarkozy, the summit's host, pressured Greek PM George Papandreou to ditch plans for a referendum on the deal. But Mr Papandreou still faces a vote of confidence which may topple his government.

And Italian PM Silvio Berlusconi was humiliatingly forced to accept IMF monitoring of his tottering economy - though he refused an offer of direct support from the global financial organisation.

A clearly dejected German Chancellor Angela Merkel confirmed that "hardly any" countries had agreed to get involved with the mooted trillion-euro firewall fund. Hopes that China would offer financial backing to the European Financial Stability Fund through a special purpose vehicle appear to have come to nothing.

And the US and other non-European countries blocked any agreement on boosting the IMF's capacity until after the eurozone has got its house in order.

A communique issued at the end of the summit said only that the G20 nations "stand ready to ensure additional resources could be mobilised in a timely manner" for the IMF.

Meanwhile, the European Commission has indicated it is considering imposing curbs on bankers' pay and bonuses.

Michel Barnier, the European Commissioner responsible for financial services, told The Independent that remuneration had returned to unjustifiable levels. He said: "It's not about penalising the banking sector. It's about asking that everyone play their role and make an effort to preserve the money available to finance the real economy."

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