Europe strives to stave off debt crisis

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Europe strives to stave off debt crisis

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Finance chiefs from around the world have turned up the heat on Europe to do more.

24 September,2011 10:35 am

European policymakers are quickening their preparations to cope with an escalation of the regions debt crisis as talk of a possible Greek default gained pace on Friday.Finance chiefs from around the world have turned up the heat on Europe to do more to prevent Greeces debt woes from infecting other euro zone countries and the world economy.Concern now appeared to be turning toward safeguarding the banking system more than rescuing Greece, as international lenders were increasingly losing patience with Athens consistently missing fiscal and reform targets.British finance minister George Osborne said the euro zone needed to gain control of the situation by the time leaders of the Group of 20 economies meet in France in November.They have six weeks to resolve this crisis, he said on the sidelines of semiannual policy discussions in Washington.World stock markets, which had plunged to a 14-month low on fears about the scale of the crisis, steadied after European Central Bank officialssaid they would use more firepower to help the banking system withstand financial strains.Pressure is growing on European governments for a recapitalization of the regions banks to strengthen them in the event of a Greek default.At the same time, European policy-makers seemed to be warming to the idea of giving more muscle to their bailout fund, which would be sorely tested if Athens defaulted.Greek Finance Minister Evangelos Venizelos was quoted by two newspapers as saying an orderly default with a 50 percent haircut for bondholders was one way to resolve the heavily indebted euro zone nations cash crunch.