G-20 rejects extra help for debt-strapped Europe

The Associated Press
Posted Nov. 04, 2011, at 8:38 p.m.

CANNES, France — The G-20 summit ended in disarray Friday without additional outside money to ease Europe’s debt crisis and new jitters about Italy clouding a plan to prevent Greece from defaulting.

In Athens, meanwhile, Greece’s prime minister survived a confidence vote in parliament, calming a revolt in his Socialist party with a pledge to seek an interim government that would secure a vital new European debt deal.

In the end, only vague offers to increase the firepower of the International Monetary Fund — at some later date — were all the eurozone leaders were able to take home after two days of tumultuous talks.

With their own finances already stretched from bailing out Greece, Ireland and Portugal — and the United States and other allies wrestling with their own problems — eurozone countries had been looking to the IMF to help line up more financing to prevent the debt crisis from spreading to larger economies like Italy and Spain.

Italy’s fate in particular is crucial to the eurozone, because its economy — the third-largest in the currency union — would be too expensive to bail out. The implications for the world economy are stark: The debt crisis that has rocked the 17-nation eurozone threatens to push the world economy into a second recession.

European leaders could point to one potential catastrophe averted: They stared down Greece’s prime minister and berated him into scrapping a referendum that threatened their European bailout plan. Greece’s politics are in upheaval as a result, but the shaky bailout plan appears back on track for now.

http://bangordailynews.com/2011/11/04/business/g-20-rejects-extra-help-for-debt-strapped-europe/ printed on July 29, 2014