EU debt deal 'shows G20 we can act': German source

31st October 2011, Comments 0 comments

The wide-ranging agreement clinched by European leaders to tackle the eurozone debt crisis should demonstrate the bloc is capable of firm action, a senior German government source said on Monday.

Speaking to reporters ahead of a critical Group of 20 meeting in Cannes on November 3 and 4, the source said that Europeans would present the "package for stabilising the euro" to the other economic powerhouses around the table.

"We want to show that we have been capable of action," said the source, who did not wish to be named.

After strong criticism from amongst others Washington for being too slow to act, EU leaders last week sealed new measures to combat the crisis, including recapitalising banks and boosting the firepower of their bailout fund.

European officials believe their leaders can go "in relaxed mood" to the G20 summit, after showing themselves ready to take decisive steps.

Berlin will make another "strong push" for progress on the stalled Doha round of trade talks, the source said, adding: "As a leading exporter, it is in Germany's interests."

The G20 communique will likely include a declaration against protectionist measures, which the source said had increased during the crisis.

"We need to fight against the impression that the Doha Round has been given up," the source said.

The G20 will tackle a raft of issues at its two-day meeting, the official said, including food and commodity prices, reforming the international currency system and curbing market excesses.

The world leaders will however consider lightening their workload, the source said.

"You will have noticed there is a wide range of topics. There is a discussion whether the G20 should focus more closely on certain topics," he said.

One area of disagreement at the Cannes meeting is likely to be the controversial topic of introducing a tax on financial market transactions, pushed by France and Germany but opposed by the United States and Britain.

Finance Minister Wolfgang Schaeuble said eurozone members could introduce such a tax even if other EU countries were opposed, in an interview with the Financial Times published Monday.

"There are certain areas where the G20 is not going as far as we would like," said the source.

German officials also announced that Chancellor Angela Merkel would hold bilateral talks with US President Barack Obama on the sidelines of the meeting.

© 2011 AFP

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