Eurozone must strengthen defenses: G20

March 1, 2012 | Last updated on March 1, 2012
1 min read

The co-ordination of global economic policy isn’t often the strong suit of G20 meetings, but finance ministers readily agreed upon one point this weekend: the rest of the world will not help the eurozone until it helps itself.

Finance Minister Jim Flaherty echoed the overall sentiment of the finance ministers in a statement made prior to the summit on Thursday, commenting that the eurozone has not yet tapped all available resources.

An agreement not to supply extra money for the IMF was reached among non-eurozone countries ahead of the meeting.

However, some suggestions were made on how to increase IMF resources in April if needed; any help will take the form of bilateral loans and may involve creating a special purpose vehicle to channel international support.

With their call for help rebuffed, European leaders have shifted their focus to bolstering the eurozone’s debt-firewall. The onus to boost the economy has been shifted primarily to Germany, the biggest single bailout contributor.

Following a vote today on a second Greek aid package, German Chancellor Angela Merkel must decide next month whether to back plans to combine rescue funds and produce a potential firewall of €750 billion ($1 trillion).

Read more about Europe’s plans, and how their own policymakers are expected to show leadership.