By Nick Mann | 20 June 2012
The eurozone members of the Group of Twenty last night pledged to take ‘all necessary measures’ to safeguard the integrity and stability of the single currency.
In a final communiqué issued at the end of the G20 summit in Los Cabos, Mexico, the 20 world leaders said they would adopt all necessary measures to strengthen global demand and growth, restore economic confidence and address job creation and unemployment.
They identified ‘strong, sustainable and balanced growth’ and increasing employment as their top priorities. The communiqué was accompanied by a Los Cabos jobs and action plan which also committed to promoting fiscal sustainability and policy credibility.
In the communiqué, they said: ‘Euro area members of the G20 will take all necessary measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks.
‘We welcome the significant actions taken since the last summit by the euro area to support growth, ensure financial stability and promote fiscal responsibility as a contribution to the G20 framework for strong, sustainable and balanced growth.’
In particular, they welcomed Spain’s plan to recapitalise its banking system, the adoption of the new fiscal compact and the imminent establishment of the new European Stability Mechanism firewall.
As efforts continue in Greece to form a coalition government following Sunday's election, the G20 said it hoped efforts would continue to keep the country inside the eurozone.
‘We look forward to the euro area working in partnership with the next Greek government to ensure they remain on the path to reform and sustainability within the euro area,’ they said.
Christine Lagarde, managing director of the International Monetary Fund, said the summit had ‘planted the seeds’ of a pan-European recovery plan.
‘European leaders committed to take all measures necessary to safeguard the integrity and stability of the euro area and break the feedback loop between sovereigns and banks,’ she said.
‘Their intention to consider concrete steps towards a more integrated financial architecture is important, and I look forward to discussing this further when I visit Europe this week to finalise the IMF’s annual review of the euro area.’
Lagarde also welcomed the additional money committed by 12 countries during the event to bolster the IMF’s firewall to $456bn. This ‘puts the IMF in a much better position to help its 188 member countries restore sounder economic and financial conditions worldwide’, she said.
She added: ‘I believe we all leave Los Cabos with a clearer common picture of what each need to do, and a renewed understanding that our actions in the near term can put us on the road to stronger growth, more jobs and less poverty in advanced, emerging and developing nations alike.’
