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G20: Bigger euro firewall needed before more IMF funds

27 February 2012 11:30 (UTC +04:00)

Baku - APA-Economics. The eurozone must put in place a bigger firewall to combat its debt crisis before other countries will help by giving more cash to the IMF, the G20 top and developing economies said.

A statement released after a meeting of the group of 20 finance ministers and central bankers here said: "Euro area countries will reassess the strength of their support facilities in March.

"This will provide an essential input in our ongoing consideration to mobilize resources to the IMF."

Calls on the eurozone to boost their crisis-fighting war chest dominated the meeting here in Mexico City, with top officials such as US Treasury Secretary Timothy Geithner saying it was essential to prevent more fallout worldwide.

"This is going to be a very difficult process of many, many years in Europe," he warned after the meeting.

At a crunch two-day summit in Brussels starting on Thursday, EU leaders will debate whether to combine their current firewall, the EFSF, with a permanent pot due to come into effect in July.

This would give the debt-wracked 17-nation zone a total fund of some 750 billion euros ($1 trillion).

Europe’s top economic official, Olli Rehn, said he was confident leaders would decide on a reinforced firewall "during the course of March," downplaying the chances of success of the summit.

To add even more firepower, the eurozone has called on countries outside the bloc to bolster the IMF’s resources.

IMF chief Christine Lagarde has said the fund needs an additional $500 billion, although she said she was "not obsessed" by this figure.