BUSINESS
02/26/2012 01:53 EST | Updated 04/27/2012 05:12 EDT

G20 Meeting Ends With No Deal On Europe's Debt

Associated Press

Representatives from the world's leading economies, known as the G20, have finished their meeting in Mexico City with no consensus on Europe's debt crisis.

Central bankers and finance ministers from countries including Canada, Brazil and Germany had been trying to hammer out a deal on a second global rescue package worth about $2 trillion US in order to prevent the crisis from spreading.

The CBC’s Amanda Lang, speaking from the meeting, said the decision on bailout money is being postponed.

A rescue package would involve Germany shovelling in more money to the European bailout fund, which Germany is reluctant to do.

“[It also] means the IMF gets more money from its member countries, including Canada, so a combination of those two things is the subject of debate [and] there’s not been consensus on this,” said Lang.

Lang said Canada and the U.S. have said they won't put up any more money unless the Germans do it first. The final decision on the European bailout will be made in April when the G20 meets again.

Angel Gurria, head of the Organization of Economic Cooperation and Development (OECD), said adequate stabilization would require at least $1.5 trillion US.

“We still have to build the mother of all firewalls. The thicker the firewall is, the less likely we’ll have to use it,” Gurria pronounced at the start of the meeting on Saturday.

The next important event is Monday when Germany’s parliament votes on whether to approve the bailout package already agreed on for Greece.

German central bank head Jens Weidmann cautioned that while “higher walls of money can buy time, that time must be used to tackle the roots of the crisis.”

Speaking on Saturday, Weidmann warned Greece needs to “keep its side of the bargain.”

So far, the Greek government’s austerity measures have included slashing pensions and benefits, and reducing the minimum wage by 23 per cent.

On Friday, the Greek government presented an offer concerning its bonds, saying they would be exchanged for new ones with a 53.5 per cent lower face value, longer maturities of up to 30 years and lower interest rates.

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