Spain in the spotlight, Merkel under G20 Pressure

Group of 20 leaders focused their response to Europe’s financial crisis on stabilizing banks as the International Monetary Fund raised its lending capacity to shield the rest of the world economy.

Emerging countries boosted their pledges to the IMF’s global firewall, nearly doubling the fund’s resources to $456 billion, at a G-20 summit in Mexico dominated by the global effort to restore confidence in the euro.

President Barack Obama and German Chancellor Angela Merkel, facing pressure from the U.S. and fellow European leaders to do more to stem the crisis, met before the summit after trading accusations in recent weeks over responsibility for the turmoil.

“The president was encouraged by what he heard regarding ongoing discussions in Europe about the paths they are pursuing to address the crisis,” White House spokesman Jay Carney told reporters during the summit in Los Cabos yesterday.

An after-dinner meeting of Obama and the leaders of the four participating euro-area countries — Germany, France, Italy and Spain — was canceled after summit participants agreed that they had spent enough time on the crisis, an official from a G-20 nation familiar with discussions said.

China, Brazil, Mexico, India and Russia announced contributions to the IMF to bolster a “second line of defense,” fund Managing Director Christine Lagarde said in an e-mailed statement. China will contribute $43 billion, the official Xinhua News Agency reported. The others’ share was $10 billion each.

Bloomberg

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