Eurozone Crisis: EU Summit Crucial, Says George Osborne

Eurozone leaders must take "impressive" action next weekend to get a grip on the crisis wracking the global economy, George Osborne said.

The Chancellor insisted the EU summit in Brussels would be a crucial moment in finding a "solution" to the problems.

He also indicated that Britain would be open to providing more money to the International Monetary Fund (IMF) - but not if it was only used to prop up the struggling single currency area.

The comments came after finance ministers from the powerful G20 countries held talks in Paris.

The eurozone has set up a European financial stability facility (EFSF) worth 440 billion euro (£384bn).

But many economists believe a fund of around two trillion euro (£1.75 trillion) will be needed fully to reassure anxious investors that banks would survive defaults by heavily indebted countries such as Greece and Italy. Final decisions are not likely to be taken until the main G20 meeting in Cannes next month.

However, there are hopes that the EU summit on October 23 will make significant progress on expanding the EFSF, as well as hammering out plans for a major write-down of Greek debt and a re-capitalisation of weaker banks.

Mr Osborne said: "We have heard from eurozone colleagues the action they are working on, but I think they will have left Paris under no misunderstanding that there is a huge amount of pressure on them to deliver a solution to the crisis," he told journalists in Paris. "It remains the epicentre of the world's current economic problems. And the European Council is clearly the moment when people are expecting something quite impressive."

US Treasury Secretary Timothy Geithner said he had heard "encouraging things from our European colleagues in Paris about a new comprehensive plan to deal with the crisis on the continent".

A statement issued at the end of the G20 meeting said ministers were "committed that the IMF must have adequate resources".