G7 leaders promise ‘speedy’ crisis response

German Chancellor Angela Merkel wants to press on with reforms for the eurozone in an effort to alleviate the financial crisis [EPA]

Finance chiefs of the Group of Seven leading industrialised powers held an emergency conference call on the euro zone debt crisis.

With Greece, Ireland and Portugal all under international bailout programmes, financial markets are anxious about the risks from a Spanish banking crisis and worry about a Greek election on June 17 that could lead Greece to leave the single currency and precipitate yet more economic turbulence.

Less than two weeks before a Group of 20 summit in Mexico that will take place as Greece holds its second round of elections in as many months, German Chancellor Angela Merkel is facing increasing pressure inside and outside the 17-nation euro area to to do more to stem the crisis.

G7 Finance ministers pledged after the talks to respond “speedily” to the eurozone’s fiscal crisis, according to Japan’s finance minister.

“We were able to share our recognition on the European issue,” Jun Azumi said after a conference call with his G7 counterparts. “The European side stated that they will respond to it speedily.”

‘Policy response’

The talks came as Spain said it could soon no longer afford to borrow on the markets in the clearest sign yet that it will require a rescue that Madrid’s European may not be able to afford.

Concern has grown that two years of problems in the eurozone are pulling the world economy out of a fragile recovery with US President Barack Obama on Friday saying the crisis in Europe had “cast a shadow” on the US after an unexpected uptick in unemployment.

The US treasury department confirmed in a statement that Europe was a key topic of the call, saying the ministers and governors reviewed developments in the global economy and financial markets “and the policy response under consideration, including the progress towards financial and fiscal union in Europe.”

Reporting from Berlin, Al Jazeera’s Nick Spicer said, referring to the promises made by G7 finance ministers, “hardly reassuring words when you keep in mind that it’s been two years and brought about upteen summits, and billions and billions of dollars in pledges”.

Spain declared on Tuesday it is being virtually shut out of stormy credit markets but a bailout is technically impossible for the eurozone’s fourth-biggest economy.