IQALUIT, CANADA: Finance chiefs from the world’s rich powers focused on the euro zone’s debt crisis at an Arctic summit and a top official said Europe was determined to solve its problems without the International Monetary Fund.
“We talked about Greece, Portugal and Spain and we told our partners we had to solve the problem ourselves without the help of the IMF,” Eurogroup chair Jean-Claude Juncker told Reuters on Saturday, the second day of a meeting of finance leaders from the Group of Seven rich industrialized nations.
Euro zone countries like Greece, Spain and Portugal are under increasing pressure to bring spending under control.
Stock markets tumbled to three-month lows on Friday as fears rose about a huge bailout and the possible destabilization of the 16-country euro zone.
IMF chief Dominique Strauss-Kahn, who is attending the G7 meetings in Canada’s remote north, said last week his institution was ready to help Greece if asked.
Guenther Oettinger, a German Conservative leader, warned in a Saturday newspaper interview that the euro currency was “in danger of becoming unstable,” although his comments contradicted those from Finance Minister Wolfgang Schaeuble.
“The euro will stay stable,” Schaeuble told reporters on Friday. “Markets always tend to overreact.” Greece, saddled with a budget deficit of nearly 13 percent of gross domestic product, is due to announce next week how it plans to raise taxes and control public pay.
European officials hope the austerity plan will fend off any need for a bailout of the country.
Despite the concerns among investors over the huge budget deficits racked up to help fight the financial crisis, including in the United States, the G7 countries will stick to their stimulus programs to help the global economic recovery, Canadian Finance Minister Jim Flaherty said on Friday.