World struggles to rescue Euro

CANNES, France (AP) – World leaders’ efforts to help Europe with its debt troubles were paralyzed Thursday by uncertainty over Greece’s political convulsions and doubts over whether Italy will enact economic reforms designed to save it from financial disaster.

European leaders had meant to use the summit of the “Group of 20” leading economies in Cannes, France, to get foreign powers like China to help with the debt crisis that has rocked the Eurozone for the past two years and threatens to push the world economy into a second recession.

But the foggy situation in Greece – where Prime Minister George Papandreou hopes the opposition will support an unpopular bail-out deal – and a lack of details on the Eurozone’s tools to keep the debt crisis from spreading, meant all negotiations were put on hold. Europe was simply not ready yet.

“The first thing is for Europe to get its act together so we have a clear picture of what Europe is proposing,” Mac Maharaj, spokesman for South African President Jacob Zuma, told The Associated Press. “We are very interested in a solution and we believe the solution is overdue.”

Whether such a solution would be found in Cannes was questionable Thursday.

US President Barack Obama, sidelined at the summit by the focus on Europe, implored European leaders to swiftly work out details of a rescue plan, aware of the political fallout back in the United States if they fail.

The “G20” leaders are talking about boosting the resources of the International Monetary Fund (IMF).

“There is a broad view among G20 leaders that there is a need for additional IMF resourcing,” Prime Minister Julia Gillard said Thursday night. “Leaders recognize that it is an appropriate move ... so people could be reassured.”

Both French President Nicolas Sarkozy and German Chancellor Angela Merkel said that Europe needed to come up with a credible strategy to restore confidence in their plan to save the Euro, presented just one week ago but undermined by the political turmoil in Greece. The leaders failed, however, to spell out how they could make progress as they themselves struggled to make sense of what was going on in Athens.

Sarkozy called Papandreou’s decision to scrap a referendum on the rescue deal and instead aim for opposition support “interesting,” while Merkel told journalists that it was still not clear to her how exactly Athens would back the deal.