The Italian prime minister, Silvio Berlusconi, right, at a G20 news conference with his finance minister, Giulio Tremonti. (Photo: Dylan Martinez/Reuters)Leaders were unable to agree upon a boost to the International Monetary Fund (IMF) to help distressed countries, while debt-ridden Italy, now seen as the epicentre of the euro crisis, was forced to put its austerity programme under the fund’s control.
UK hopes that the Germans would relent and allow the European Central Bank to become the lender of last resort for the euro were also dashed.
In a day of unremitting gloom, and yet more market turbulence, the Greek government also stood on the precipice of collapse, risking an uncontrolled default, as the government of George Papandreou faced a late-night confidence vote in parliament. Prime Minister Papandreou was forced to cancel plans for a referendum on the euro.
The sense of stasis led the British prime minister, David Cameron, to issue a stark warning about the impact of the crisis on the world economy: “Every day that the eurozone crisis continues and every day it is not resolved is a day that it has a chilling effect on the rest of the world economy, including the British economy. I am not going to pretend all the problems in the eurozone have been fixed. They have not. The task for the eurozone is the same as going into this summit. The world can’t wait for the eurozone to through endless questions and changes about this.
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