Pressure mounts on eurozone at G20 finance meeting

Finance ministers of the G20 group of nations have been meeting in Paris, with pressure mounting on the euro zone to tackle its debt crisis. A draft communique stresses the need for "further work to maximize the impact" of the EFSF fund, set up to help governments in financial trouble. Pressure mounts on eurozone at G20 finance meeting British Finance Minister George Osborne said eurozone members would leave Paris with "no misunderstanding" of the pressure. Fears remain of a contagion of debt spreading across eurozone countries. The U.S. has expressed particular concern about the threat to its economy. U.S. President Barack Obama and German Chancellor Angela Merkel spoke by phone on Friday to discuss the crisis. The draft communique says it welcomes "the ambitious reform of the European economic governance" and the eurozone's commitment to "increase the capacity and the flexibility of the European Financial Stability Facility (EFSF)". It adds: "We look forward to further work to maximize the impact of the EFSF in order to address contagion". The draft communique still has to be signed off by the finance ministers of the G20, which represents about 85 percent of the global economy. The final communique is expected around 15:00 GMT, along with a series of press conferences. The EFSF has been used to fund bailout packages for Ireland and Portugal but there have been fears it will not be able to cope if it is needed to rescue larger economies such as Spain and Italy, both of which have had their credit ratings downgraded in recent weeks. Osborne told reporters in Paris: "We have heard from eurozone colleagues the action they are working on, but I think they will have left Paris under no misunderstanding that there is a huge amount of pressure on them to deliver a solution to the crisis. "It remains the epicentre of the world's current economic problems. And the European Council is clearly the moment when people are expecting something quite impressive." The council meeting is scheduled for October 23. There are suggestions that plans will include recapitalizing banks and addressing Greece more effectively, as well as strengthening the EFSF. The draft communique reads: "We will ensure that banks are adequately capitalised and have sufficient access to funding. Central banks have recently taken decisive actions to this end and will continue to stand ready to provide liquidity to banks as required." Another area under discussion in Paris has been whether to strengthen the International Monetary Fund (IMF). Developing countries want to boost it, but the U.S. in particular has been reluctant, wanting instead for the eurozone to take stronger action. U.S. Treasury Secretary Timothy Geithner said he believed that both the IMF and EU already had sufficient funds. He said: "As we look at the world today, the IMF has very substantial, uncommitted, available financial resources. "Of course, Europe as a whole has resources available to help with the financial problems." He said Europe was "clearly moving" to deal with the crisis. Athens is now likely to get its next loan installment – totaling EUR 8bn euros - in November after inspectors from the EU, International Monetary Fund (IMF) and European Central Bank said they had reached agreement with the Greek government on further austerity measures in the country. The representatives from the so-called troika had been in Athens to check on whether the Greek government was carrying out sufficient spending cuts and tax raising measures.

Pressure mounts on eurozone at G20 finance meeting

British Finance Minister George Osborne said eurozone members would leave Paris with "no misunderstanding" of the pressure.

Fears remain of a contagion of debt spreading across eurozone countries.

The U.S. has expressed particular concern about the threat to its economy.

U.S. President Barack Obama and German Chancellor Angela Merkel spoke by phone on Friday to discuss the crisis.

The draft communique says it welcomes "the ambitious reform of the European economic governance" and the eurozone's commitment to "increase the capacity and the flexibility of the European Financial Stability Facility (EFSF)".

It adds: "We look forward to further work to maximize the impact of the EFSF in order to address contagion".

The draft communique still has to be signed off by the finance ministers of the G20, which represents about 85 percent of the global economy.

The final communique is expected around 15:00 GMT, along with a series of press conferences.

The EFSF has been used to fund bailout packages for Ireland and Portugal but there have been fears it will not be able to cope if it is needed to rescue larger economies such as Spain and Italy, both of which have had their credit ratings downgraded in recent weeks.

Osborne told reporters in Paris: "We have heard from eurozone colleagues the action they are working on, but I think they will have left Paris under no misunderstanding that there is a huge amount of pressure on them to deliver a solution to the crisis.

"It remains the epicentre of the world's current economic problems. And the European Council is clearly the moment when people are expecting something quite impressive."

The council meeting is scheduled for October 23.

There are suggestions that plans will include recapitalizing banks and addressing Greece more effectively, as well as strengthening the EFSF.

The draft communique reads: "We will ensure that banks are adequately capitalised and have sufficient access to funding. Central banks have recently taken decisive actions to this end and will continue to stand ready to provide liquidity to banks as required."

Another area under discussion in Paris has been whether to strengthen the International Monetary Fund (IMF).

Developing countries want to boost it, but the U.S. in particular has been reluctant, wanting instead for the eurozone to take stronger action.

U.S. Treasury Secretary Timothy Geithner said he believed that both the IMF and EU already had sufficient funds.

He said: "As we look at the world today, the IMF has very substantial, uncommitted, available financial resources.

"Of course, Europe as a whole has resources available to help with the financial problems."

He said Europe was "clearly moving" to deal with the crisis.

Athens is now likely to get its next loan installment – totaling EUR 8bn euros - in November after inspectors from the EU, International Monetary Fund (IMF) and European Central Bank said they had reached agreement with the Greek government on further austerity measures in the country.

The representatives from the so-called troika had been in Athens to check on whether the Greek government was carrying out sufficient spending cuts and tax raising measures.