Brussels, 20/06/2012 (Agence Europe) - The eurozone sovereign debt crisis, the delays in restoring the Greek economy and the cost of refinancing the Spanish debt were the main subject of concern at the G20 summit on Monday 18 and Tuesday 19 June in Los Cabos (Mexico). The president of the European Council, Herman Van Rompuy, and the president of the European Commission, José Manuel Durão Barroso, said in their final statement that the G20 talks had focused on the eurozone. Recognising their share of the blame for the economic woes of the world, Europe said it was not the only problem, pointing to the huge US debt and China's vast surpluses. On Monday evening, Barroso was clearly upset and pointed out that the 2008 financial crisis had not originated in Europe and not all G20 nations were genuine democracies.
The final G20 summit press release focuses on action to deal with the euro's problems, noting that eurozone nations will take measures necessary to keep the eurozone together and break the vicious circle of public debt and bank problems. Bailing out the Spanish banks will increase the Spanish public debt, despite the government's attempts to get the EFSF bailout fund rules changed so the cash can go directly to the banks (see EUROPE 10637). The G20 welcomes the fact that the Eurogroup has promised up to €100 billion to recapitalise the country's banks, saying that the fiscal compact, along with growth-stimulating policies, structural reforms and measures to boost financial stability were important stages in the move towards greater economic and budget integration to ensure affordable borrowing costs and backed the eurozone's move to strengthen economic and monetary union through a more integrated financial architecture covering supervision, the management of failed banks, recapitalisation and savings guarantees for the banking system.
Van Rompuy and Barroso said that the G20 had recognised that a strong and deeply integrated European Union was crucial for world stability, which reflects the impulse given in Europe. They said the EU was determined to demonstrate the irreversible nature of the euro and the European project alike.
Economic imbalances. As is customary at summits, the G20 recommended a re-balancing of global economies, calling for budget surplus countries like Germany and China to continue to support domestic spending and for the United States to cut public spending gently in order to ensure the budget does not contract sharply in 2013. The BRICS announced how much extra cash they will be providing to the IMF. The G20 statement made no mention of a financial transactions tax (see separate article). (MB/transl.fl)