Osborne presses Eurozone leaders

George Osborne has urged world leaders to put the global economy back on track by containing the eurozone crisis.

Arriving for this weekend's meeting of G20 finance ministers in Paris, the Chancellor said solving the problems would provide a major boost to growth.

The gathering is expected to back moves by European leaders and the International Monetary Fund (IMF) to expand bailout funds that could rescue heavily-indebted nations such as Greece.

The eurozone has set up a European financial stability facility (EFSF) worth 440 billion euro. But many economists believe a fund of around two trillion euro will be needed fully to reassure anxious investors.

Final decisions are not likely to be taken until the main G20 meeting in Cannes next month.

Mr Osborne said: "The countdown to the Cannes summit of world leaders begins this weekend.

"The biggest boost to global and British growth would be a resolution to the eurozone crisis. Momentum is now finally building towards that.

"We should use this weekend to keep up the pressure and step up the pace."

Yesterday G20 finance chiefs wrangled over whether the eurozone should cover the whole bill for the growing debt crisis or whether the rest of the world should contribute more.

The IMF has so far funded about a third of costs of bailing out Greece, Portugal and Ireland.

Although some argue that Europe can afford to spend its way out of the crisis, there are calls for more support as the eurozone's debt troubles risk sparking another global recession.

Talks are expected to centre on Greece, amid fears the crisis could spread to other heavily indebted eurozone countries such as Spain and Italy if it defaults on its debt.

Spain suffered a blow on Thursday as credit ratings agency Standard & Poor's reduced the country's long-term rating by one notch - a week after Fitch also cut Spain's rating.

Meanwhile, Fitch cut the long-term ratings for Lloyds Banking Group and Royal Bank of Scotland by two notches on Thursday to reflect weakening support for the banking sector from the Government.

PA