G-20 leaders call for Europe to fix finance woes

LOS CABOS, Mexico (AP) — European leaders at the G-20 summit struggled to reassure the world Monday that they were on the path to solving their continent’s relentless economic crisis, defending the pace of their response even as market pressures pushed Spain closer to needing a bailout that would strain the world’s ability to pay.

Less than 24 hours after an election that eased fears of a Greek exit from the shared euro currency, the interest rate that Spain pays on its debt surged above the 7-percent level that had forced Greece, Portugal and Ireland to seek international help.

The prospect of a bailout for Spain’s $1.39 trillion economy immediately eclipsed the good feeling at the G-20 from the election, and it dwarfed the host country Mexico’s expressions of confidence that the meeting of the world’s largest economies would lead to more than $430 billion in concrete commitment for the International Monetary Fund as insurance against future bailouts.

The Spanish delegation to the G-20 bemoaned the rise in the country’s borrowing costs and said the market reaction didn’t correspond to the reality of Spain’s economic strength.

“We in the government are convinced that the current situation of punishment in the markets, what we’re suffering from today, doesn’t correspond with the efforts, or the potential, of the Spanish economy,” Spain’s economy minister Luis de Guindos said. “This is something that will have to be recognized in the coming days and weeks.”

The day was filled with statements from a variety of world leaders calling for cooperation and for Europe to solve its crisis at a summit that is expected to produce few concrete results.

“Now is the time as we’ve discussed to make sure all of us join to do what’s necessary to stabilize the world financial system, to avoid protectionism, to both grow the economy and create jobs while taking a responsible approach,” President Barack Obama said after meeting with Mexican President Felipe Calderon.

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