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October 31, 2011 at 09:37 AM
Ahead of a meeting of the G20 scheduled for Thursday and Friday in Cannes, France, euro one leaders seeking funding for an expansion of the European Financial Stability Facility found it difficult to pry cash out of G20 nations as policymakers press for details of the plan.
Bloomberg reported Monday that while French President Nicolas Sarkozy was taking heat from political rivals for approaching China in search of funding for the bailout fund, other countries were slow to pledge support. The meeting will once again plunge leaders into crisis resolution mode, and in an attempt to bolster a spirit of cooperation, European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy wrote to G20 governments Saturday to stress “a continued need for joint action by all G20 partners in a spirit of common responsibility and common purpose.”
Doubts plague the plan to boost the bailout fund, ranging from the difficulty of doing so to whether its new target size will be large enough to be effective. Moody’s Investors Service called the plan “negative” for triple-A-rated nations in the eurozone, because they will likely be on the hook for providing more support.
While a number of countries, including Japan and the BRICS—Brazil, Russia, India, China and South Africa—have said they will support the plan, with the BRICS in discussions about a possible joint effort, all are waiting for more details to emerge on how the fund will be structured. Such details are not expected to emerge until late November, when the bailout-fund restructuring is expected to be finalized.
