Representatives from the world’s leading superpowers – known collectively as the G20 – met in Mexico City recently to discuss ways to resolve the current European debt crisis. Mexican president Felipe Calderon,who is currently the G20 chair,asked to group to enact stricter rules for financial institutions and spoke about the shared responsibility held by the world’s leading economies.
“Those who grant credit,the banks and financial institutions,also have to assume those losses,” stated Calderon,speaking about the debt crisis occurring in countries like Greece. “A good part of the crisis originates in erroneous decisions and excessive and abusive risk-taking by private and public financial institutions.”
The world leaders,including bankers and finance ministers,failed to reach a consensus on how to deal with the European debt crisis,however,as they discussed ways to enact a second global rescue package totaling more than $2 trillion dollars that would hopefully prevent the crisis from growing. Instead,the decision on putting together a bailout package has been postponed,in large part due to reluctance from Germany.
“It also means the IMF gets more money from its member countries,including Canada,” stated CBC’s Amanda Lang. “So a combination of those two things is the subject of debate and there’s not been a consensus on this.”
Both Canada and the United States have said they will not contribute more money to a bailout fund unless Germany does as well,so the final decision has been postponed until April when the G20 is scheduled to meet again.
Prior to the February meeting in Mexico City,the Bank of Mexico Gov. Agustin Carstens referenced the ongoing efforts to increase funding from G20 member states,which would create “firewalls” around Europe’s main financial institutions that would help to prevent future financial meltdowns. Carstens has also expressed optimism surrounding the progress made at the recent meeting and is hopeful that April’s summit will produce significant results.