Wall Street Journal
February 23, 2012
Members of the Group of 20 advanced and developing economies plan to renew pressure on Europeans in the coming days to expand their Continent-wide bailout funds quickly, despite the latest rescue deal for Greece.
Finance ministers and central bankers from the world's leading economic powers convening in Mexico City this weekend are expected to discuss an effort by the International Monetary Fund, announced last month, to more than double its lending capacity to almost $1 trillion.
But officials from outside Europe will insist again that euro-zone nations put more of their own money on the table first, to build a larger financial firewall to guard against new trouble, including a spike in borrowing costs for struggling nations such as Italy and Spain.
"What is going to matter most for restoring market confidence, for establishing market credibility, is that signal of commitment by euro-area members to defend the euro area," U.S. Treasury Under Secretary for International Affairs Lael Brainard said Wednesday.
A strong firewall funded by Europe would "provide assurances that sovereigns who are undertaking reforms will be able to finance themselves at sustainable rates," she said.
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