CANNES, France — Europe failed to get the leaders of the world’s wealthiest economies to help out with its debt troubles, but everyone left a G-20 summit Friday relieved that at least they forced the Greek prime minister not to hold the world hostage with a bailout vote.
It took a public berating of Greek Prime Minister George Papandreou, and Greece’s politics are in upheaval as a result, but the shaky bailout plan appears back on track for now.
Investors had been hoping the Group of 20 nations would lend the struggling eurozone a helping hand — but the G-20 leaders said Europe needs to help itself first. They said the International Monetary Fund could be beefed up to help more, but not for at least three more months.
The debt crisis that rocked the 17-nation currency union for the past two years has reached a new high and now threatens to push the world economy into a second recession. Despite the political firepower at the summit — which included the leaders of Europe, China, Russia, Brazil, India and the United States, among others — the meeting was overshadowed by political turmoil in Greece and worries about Italy, which accepted IMF supervision of its reform efforts.
The IMF move was an highly unusual intervention into the affairs of one of the world’s leading economies.
Europe’s own rescue efforts, cobbled together at several crisis meetings last week, left open many important questions, making cash-rich countries like China, Russia or Brazil reluctant to commit more than just words.
“It’s important that the IMF sees its resources reinforced,” Jose Manuel Barroso, the president of the European Commission, told reporters. However, any decisions on how to reinforce the IMF were left until February.
The lack of detail disappointed markets, with stocks, bonds and the euro falling. Italy’s borrowing rates, in particular, hit worrying new highs.
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