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G20 finance ministers in day two of eurozone talks Pressure mounts on eurozone at G20 finance meeting
(about 2 hours later)
  
Finance ministers of the G20 group of nations are meeting in Paris to continue talks on solving the eurozone debt crisis. Finance ministers of the G20 group of nations have been meeting in Paris, with pressure mounting on the eurozone to tackle its debt crisis.
One question is whether the International Monetary Fund should increase in size as part of a broader global response to the situation. A draft communique stresses the need for "further work to maximise the impact" of the EFSF fund, set up to help governments in financial trouble.
However the idea has been met with some resistance by the US, reports say. UK finance minister George Osborne said eurozone members would leave Paris with "no misunderstanding" of the pressure.
On Friday, US President Barack Obama and German Chancellor Angela Merkel spoke by phone to discuss the crisis. Fears remain of a contagion of debt spreading across eurozone countries.
US officials said Mr Obama had warned of the risks posed to the US economy, and also discussed preparations for a G20 summit in Cannes scheduled for early next month. The US has expressed particular concern about the threat to its economy.
'Clearly moving' US President Barack Obama and German Chancellor Angela Merkel spoke by phone on Friday to discuss the crisis.
Talks are expected to remain focused on Greece, amid fears that the crisis could spread to other highly indebted eurozone countries such as Spain and Italy, and exposed European banks. 'Contagion'
One G20 source told Reuters that a proposal to inject $350bn (£221bn) into the IMF had been backed by some emerging market policymakers. The draft communique says it welcomes "the ambitious reform of the European economic governance" and the eurozone's commitment to "increase the capacity and the flexibility of the European Financial Stability Facility (EFSF)".
It adds: "We look forward to further work to maximise the impact of the EFSF in order to address contagion".
However, US Treasury Secretary Timothy Geithner said he believed that both the IMF and EU already had sufficient funds. The draft communique still has to be signed off by the finance ministers of the G20, which represents about 85% of the global economy.
The final communique is expected around 15:00 GMT, along with a series of press conferences.
The EFSF has been used to fund bailout packages for Ireland and Portugal but there have been fears it will not be able to cope if it is needed to rescue larger economies such as Spain and Italy, both of which have had their credit ratings downgraded in recent weeks.
Mr Osborne told reporters in Paris: "We have heard from eurozone colleagues the action they are working on, but I think they will have left Paris under no misunderstanding that there is a huge amount of pressure on them to deliver a solution to the crisis.
"It remains the epicentre of the world's current economic problems. And the European Council is clearly the moment when people are expecting something quite impressive."
The council meeting is scheduled for 23 October.
There are suggestions that plans will include recapitalising banks and addressing Greece more effectively, as well as strengthening the EFSF.
The draft communique reads: "We will ensure that banks are adequately capitalised and have sufficient access to funding. Central banks have recently taken decisive actions to this end and will continue to stand ready to provide liquidity to banks as required."
Another area under discussion in Paris has been whether to strengthen the International Monetary Fund (IMF).
Developing countries want to boost it, but the US in particular has been reluctant, wanting instead for the eurozone to take stronger action.
US Treasury Secretary Timothy Geithner said he believed that both the IMF and EU already had sufficient funds.
He said: "As we look at the world today, the IMF has very substantial, uncommitted, available financial resources.He said: "As we look at the world today, the IMF has very substantial, uncommitted, available financial resources.
"Of course, Europe as a whole has resources available to help with the financial problems. "Of course, Europe as a whole has resources available to help with the financial problems."
"The problems that they are facing there in Europe are complicated to solve, but well within the resources that Europe has." He said Europe was "clearly moving" to deal with the crisis.
Mr Geithner told CNBC television from Paris: "What you need is the clear commitment by the governments, that they will do what is necessary to hold this together and put as much resources behind this as is necessary."
He said Europe "is clearly moving" to deal with the crisis.
'Enforced immediately'
Ministers from outside the eurozone have been pressing European leaders to take decisive action to solve the crisis.
However, analysts say that any major decisions will not be announced until the meeting of European Union (EU) leaders on 23 October.
They are expected to include increasing the funding and powers of the European Financial Stability Facility (EFSF), the fund set up to help national governments in financial difficulty.
The European Commission President, Jose-Manuel Barroso, said on Friday that any decisions taken at the meeting on increased guarantees for banks or on strengthening the EFSF "should be enforced immediately".
Measures to protect European banks with high levels of exposure to eurozone national debt are also expected to be decided by EU leaders.
UK Chancellor George Osborne, arriving for the Paris meeting, said: "The biggest boost to global and British growth would be a resolution to the eurozone crisis. Momentum is now finally building towards that.
"We should use this weekend to keep up the pressure and step up the pace."
Athens is now likely to get its next loan instalment - totalling 8bn euros ($11bn; £7bn) - in November after inspectors from the EU, International Monetary Fund (IMF) and European Central Bank said they had reached agreement with the Greek government on further austerity measures in the country.Athens is now likely to get its next loan instalment - totalling 8bn euros ($11bn; £7bn) - in November after inspectors from the EU, International Monetary Fund (IMF) and European Central Bank said they had reached agreement with the Greek government on further austerity measures in the country.
The representatives from the so-called troika had been in Athens to check on whether the Greek government was carrying out sufficient spending cuts and tax raising measures.The representatives from the so-called troika had been in Athens to check on whether the Greek government was carrying out sufficient spending cuts and tax raising measures.