Germany may not be ready to back an increase in the euro zone’s bailout fund at a summit next week, delaying progress towards building up nearly $2 trillion in firepower to tackle fallout from Europe’s sovereign debt crisis.
Finance leaders from leading economies, meeting in Mexico City this weekend, are trying to secure a massive international fund to prevent the crisis from spreading throughout financial markets and threatening a fragile world recovery.
They are demanding that Europe increase its own firewall before the Group of 20 economies agree to contribute more resources to the International Monetary Fund. As Europe’s paymaster, Germany’s support for a larger European fund is critical, and G20 members are piling on the pressure.
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