G20 Urges EU To Resolutely Deal With European Debt Challenge

In the joint statement of the finance ministers and central bank governors of the group of twenty (G20), who are full of diplomatic rhetoric, senior officials from various countries said they expect to convene in October 23rd. European Union The summit can resolutely resolve the current challenges through a comprehensive plan.

The two day meeting of Paris's G20 finance ministers and central bank governors ended on the 15 day in the gunpowder flavour, and the parties within the time limit gave a solution within 8 days.

As chairman of the G20 finance ministers and central bank governors and French finance minister Baroin, France and Germany have reached a basic consensus on reducing Greek debt, easing the spread of the debt crisis and protecting European banks.

Banks oppose further write downs on Greek debt

"Through further work, we hope to maximize the influence of the European financial stability mechanism (EFSF) to avoid crisis spreading." The joint statement said, "we look forward to the European Commission's comprehensive response to the current challenges in October 23rd."

The EU's strategic plan is yet to be made public, but according to people familiar with the matter, the plan includes a write down of up to 50% of Greek bonds, an increase in EFSF's authority and no exclusion of compulsory financial institutions. capital The possibility of reorganization.

The agreement will be reached at the European Union summit on 23 days to further write down Greek bonds. However, the voluntary agreement has been strongly opposed by the banking sector, including Germany, and believes that the amount of writedowns should not exceed the bottom line of 21% in July this year.

Schmits, President of the German Banking Association, said: "the rescue plan launched by heads of European governments requires private banks to help them out, which is hard to do."

To help Greece overcome the crisis, the European Union has implemented loan relief to Greece and decided to reduce its debt by 21%.

At the same time, the French banking association also said that increasing loans by European banks would not help overcome the debt crisis in the eurozone, and countries should rebuild confidence in the country's fiscal policy.

Ackerman, chief executive of Deutsche Bank, said on 13 th that if European leaders want both banks to raise capital levels and banks to write down their sovereign debt significantly, they will lead to serious credit deficiencies.

At the same time, in terms of bank capital restructuring, German finance minister Schauble said he did not rule out the possibility of compulsory financial institutions recapitalization.

"If some important banks can not raise their own capital through their own power, the government can provide corresponding help when necessary." He said.

This proposal has also been strongly opposed by the German industry, but German banks, including Germany bank, which are known for their prudent reputation, have received the attention of credit rating agencies.

Appeal to expand SDR basket currency type

Under the shadow of the European debt crisis, the issue of RMB remittance has been obscure.

Reporters observed that in the joint statement of G20 finance ministers and central bank governors, we also mentioned that "we look forward to broadening the special drawing rights (SDR) basket in Cannes's G20 Summit on the basis of standards."

"We reaffirm our common interests in a strong and stable international financial system, and we support the market determined exchange rate." The joint statement said, "we reiterate that excessive fluctuations in exchange rates and disorderly changes in exchange rates will adversely affect economic and financial stability.

Earlier, the European Union said before the meeting that it would call for a clear plan to expand the special drawing rights of IMF and promote a more market-oriented RMB exchange rate. In fact, when President Sarkozy met with us president Obama last month, Sarkozy declared that the RMB should be included in the SDR.

Prior to this, the French finance minister Baruan Sarkozy visited China, he said to the first financial daily that before the G20 Cannes summit in November, the issue of RMB included in the basket of currencies of the IMF special drawing rights issue will be worked out.