World Business

G20 to back euro zone on debt, sidestep bank levy

(Agencies)
Updated: 2010-06-04 11:43

BUSAN, South Korea: G20 finance ministers and central bankers will endorse efforts to douse the euro zone's debt crisis but are far apart on the contentious issue of a global bank levy, a senior South Korean official said on Friday.

Speaking before the start of two days of talks bringing together the world's top developed and emerging economies, the official played down expectations of new agreements or initiatives to steady a global economy unnerved by Europe's budget woes and fears of a relapse in growth.

"Regarding the current crisis, the G20 is very vigilant on developments and supports the initiatives made by the EU and the IMF to remedy the problem," Sakong Il, chairman of the presidential committee for the G20, told reporters.

As well as a 110 billion euro ($133.9 billion) bailout for Greece, the 16-member euro zone is slinging a financial safety net under other heavily indebted countries that use the single currency.

Together with money from the International Monetary Fund, the support could total 750 billion euros ($910 billion).

Related readings:  G20 finance officials begin global economy talks   Wen: Global economy double-dip possible  European debt crisis not fatal to China's economy  Europe debt crisis to have limited impact on China

Markets initially responded enthusiastically to the rescue package, but the euro has since slumped out of concern that countries such as Portugal and Spain will be unable to rein in their large budget deficits.

Global stock markets have tumbled in turn on fears of a new hit to economic growth.

Youssef Boutros-Ghali, Egypt's finance minister who also heads the IMF's policy-steering committee, said Greece's problems were not over and there was a question mark over its ability to implement reforms demanded by the EU and IMF.

In an interview with Reuters, he warned that after helping bail out Greece the Fund needed a very significant increase in its funds.