Washington/Brussels - G7 finance ministers and central bank governors
agreed on Tuesday to focus special attention on eurozone banking
developments ahead of the G20 summit in Mexico, according to US and
Canadian officials.
The meeting of officials from the Group of 7
industrialized countries came amid speculation that Spain will need a
bailout - the latest crisis to hit the eurozone.
The European
Central Bank was to meet Wednesday, with renewed turmoil in the eurozone
and faltering global economic growth likely to force the
Frankfurt-based ECB into a possible rethink of its current strategy,
which could mean a cut in interest rates.
On Tuesday, the United States urged Europe to strengthen its banking system.
A
European Union spokesman dismissed suggestions that the G7 conference
call was a sign of the bloc's economic crisis getting worse. Amadeu
Altafaj, spokesperson for EU Economy Commissioner Olli Rehn, told
reporters in Brussels that it was a "regular" exchange that was not
"extraordinary."
In Washington, White House spokesman Jay Carney
said the G7 officials had agreed to monitor financial developments
closely ahead of the Mexico G20 summit on June 18 and 19.
The
officials had discussed "the policy response under consideration,
including the progress towards financial and fiscal union in Europe,"
Carney said. The Canadian Finance Ministry released a statement with
similar wording, the Globe and Mail newspaper reported.
Carney
said the United States faced large "headwinds" from the two-year-long
eurozone crisis, since its economy is so intertwined with that of
Europe. He urged Europe to maintain its sense of "urgency" about its
financial crisis and said the US was taking steps to "insulate the
American economy" from challenges posed by Europe and elsewhere.
"There is much work to be done in Europe," Carney said.
"We're
hoping to see accelerated European action over the next several weeks,
including in the run-up to the (G20) meeting in Mexico," Carney said. "A
movement to strengthen the European banking system will be of
particular importance in this time period."
Speculation about
Spain needing an international bailout has been plaguing the EU in
recent weeks, as the country struggles to tackle problems in its banking
sector.
"That there is concern about the situation in Europe,
frankly I find that completely normal," Altafaj said. "We are the first
to confront it. We are not sweeping anything under the carpet."
The
G7 encompasses Britain, Canada, France, Germany, Italy, Japan and the
United States. European officials such as Jean-Claude Juncker, the
president of the Eurogroup panel of EU finance ministers, have also
taken part in past meetings.
Altafaj said that the European
Commission is "always involved in these exchanges" and that although
Rehn was in Riga on Tuesday, "phones work everywhere." He declined,
however, to confirm his participation.
