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Pressure mounts on eurozone at G20 finance meeting EU summit 'will be decisive' on eurozone crisis
(about 4 hours later)
  
Finance ministers of the G20 group of nations have been meeting in Paris, with pressure mounting on the eurozone to tackle its debt crisis. A European Union summit later this month will agree "decisive" measures to tackle the eurozone debt crisis, the French finance minister has said.
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. The summit would give "clear answers", said Francois Baroin at the end of talks between ministers from the G20 group of nations in Paris.
UK finance minister George Osborne said eurozone members would leave Paris with "no misunderstanding" of the pressure. He said central banks "would continue to supply banks with liquidity".
Fears remain of a contagion of debt spreading across eurozone countries. The G20 statement also said ministers were "committed that the IMF must have adequate resources".
The G20 meeting came amid continuing fears about the EU's debt-related problems spreading.
The US has expressed particular concern about the threat to its economy.The US has expressed particular concern about the threat to its economy.
US President Barack Obama and German Chancellor Angela Merkel spoke by phone on Friday to discuss the crisis.US President Barack Obama and German Chancellor Angela Merkel spoke by phone on Friday to discuss the crisis.
'Contagion''Contagion'
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)". US Treasury Secretary Timothy Geithner said he had heard "encouraging things from our European colleagues in Paris about a new comprehensive plan to deal with the crisis on the continent".
It adds: "We look forward to further work to maximise the impact of the EFSF in order to address contagion". "The plan has the right elements," Mr Geithner said.
Finance ministers from the world's leading economies have said they are willing to help, but only if the eurozone first helps itself by coming up with a plan that responds to the true scale of the crisis, says the BBC's Hugh Schofield in Paris.
The draft communique still has to be signed off by the finance ministers of the G20, which represents about 85% of the global economy. Details of the plan include a bigger write-down than previously expected of Greek debt, a much more powerful European bailout fund and a re-capitalisation of weaker banks to arm them against inevitable losses.
The final communique is expected around 15:00 GMT, along with a series of press conferences. The plan needs to be finalised by next weekend's EU summit in Brussels.
The G20 ministers said they welcomed the measures "to increase the capacity and the flexibility of the EFSF [European Financial Stability Facility]".
The statement added: "We look forward to further work to maximise the impact of the EFSF in order to avoid contagion, and to the outcome of the European Council on October 23 to decisively address the current challenges through a comprehensive plan."
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.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).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.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.
"Of course, Europe as a whole has resources available to help with the financial problems."
He said Europe was "clearly moving" to deal with the crisis.
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.