G7 ministers hold Eurozone Crisis Talks

(Paris) – Finance ministers of the Group of Seven and other economic powers hold talks by phone on the eurozone crisis and the threat it poses to the world economy. Ahead of the talks, markets worried about sluggish world growth anticipated coordinated action by central banks, but the rumours later subsided.
Few details on the meeting’s agenda have emerged, with only Canadian Finance Minister, Jim Flaherty revealing that the discussion addressed Europe and troubled banks on the continent, which are a “real concern” of the moment. “Those discussions also take place with some of the non-European members of the G20 who are concerned… with the potential consequences of a crisis in the eurozone,” Flaherty told a Toronto press conference. “The real concern right now is Europe, the weakness in some of the banks in Europe, the fact they’re undercapitalized, the fact the other European countries in the eurozone have not taken sufficient action yet to address those issues of undercapitalization of the banks and building an adequate firewall,” he said.
Concern has grown that some Spanish banks could collapse without direct aid from Europe. But Germany has resisted allowing funds from the region’s financial firewall, the European Stability Mechanism, to be lent directly to banks rather than via governments and has called on Madrid to request a proper rescue. But Spanish Budget Minister, Cristobal Montoro said it was technically impossible to rescue the debt-laden economy, the fourth largest in the eurozone.