Europe Urged to Fix Crisis

G-20 warns European government that debt problems still threaten global growth.

Europe’s governments were told the onus for fixing their debt woes lies with them as the Group of 20 warned the two-year crisis still threatens global growth.

With finance chiefs from the G-20 meeting today in Washington, those from Canada and Australia joined the IMF and U.S. in pressing Europe to intensify efforts to quell the turmoil as it spreads to Spain. The G-20 cited “the situation in Europe” first in a list of drags on the world economy, according to a draft statement obtained by Bloomberg News.

Final Amount

“I can assure you that the G-20 will announce the final amount” today, Russian Deputy Finance Minister Sergei Storchak told reporters in Washington late yesterday. “This will be the sum that will suit the leadership of the International Monetary Fund.”

European Banks

A day after the IMF said European banks could be forced to sell as much as $3.8 trillion through next year, Lagarde said European governments should consider using their rescue funds to inject cash directly into Spanish banks. Other advice the IMF has given this week included for the ECB to cut interest rates again, for governments to issue joint debt and for banks to be restructured.

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