By Krista Hughes, Reuters
LOS CABOS, Mexico — The world’s biggest economies must commit to a strong Europe and could agree to further bolster the International Monetary Fund’s ability to contain fallout from Europe’s debt crisis, Mexican President Felipe Calderon said on Saturday. Calderon will host the Group of 20 (G-20) leaders at a summit starting on Monday in Mexico’s Pacific resort of Los Cabos, with the meeting overshadowed by crucial elections in Greece and mounting worries about Spain and Italy. “Even though we don’t expect to reach specific agreements on Europe … I want to see language and promises which are much more oriented to a new, stronger Europe, a Europe of the 21st century,” Calderon told international news agencies. Greece’s elections on Sunday could help decide whether the country will remain in the eurozone, battling a debt crisis that has dragged on for 2 1/2 years. Calderon said it was important to be prepared for any scenario in terms of the result. Mexico’s first priority for the summit was to finalize G-20 members’ pledges to give the IMF more crisis-fighting resources, Calderon said. In April, G-20 countries pledged at least US$430 billion in new loans to the IMF so it could help countries hit hardest by the debt crisis. But emerging market powers such as Brazil, China, Russia and Mexico itself have not yet said what specific amount they will contribute. “I estimate that it could be a bigger capitalization than the preliminary agreement reached in Washington, which will be finalized here, but I don’t want to speculate how much,” Calderon said, adding it was “a pity” that Canada and the United States were not chipping in. Calderon would not be drawn on the specifics of Mexico’s contribution, which should be at least US$8 billion given the country’s share in the IMF’s capital. He said it would be more than US$1 billion, but would not comment on whether it would exceed US$10 billion, the amount Brazil has named as a yardstick for its contribution. No Magic Solution Former British Prime Minister Gordon Brown wrote in a column for Reuters that the G-20 must produce a concerted global action plan, including a big European firewall to stop contagion and a comprehensive growth plan.
Calderon said it would be impossible to solve all of Europe’s problems at the G-20, but added the region was on the right track. The most important thing is for Europe to use the opportunity to forge closer links on budgets and banking to make the region more resilient, he said. “In whatever case, I think that our contribution in the G-20 … is to create the right conditions so that the fate or the economic future of Europe does not depend on one case,” he said. “That implies first making progress in the construction of the European Union.” European Union leaders will meet on June 28-29 to consider laying out a roadmap for fiscal and possibly banking union in the region.