THE world's leading economies pressed Europe to act decisively within eight days to resolve the eurozone's sovereign debt crisis which is endangering the world economy.

In unusually direct language, finance ministers and central bankers of the Group of 20 major economies said on Saturday they expected an European Union summit next Sunday to "decisively address the current challenges through a comprehensive plan."

French Finance Minister Francois Baroin, who chaired the meeting, said Berlin and Paris, the leading eurozone powers, were well on the way to agreeing a plan to reduce Greece's debt, stop contagion and protect Europe's banks.

Non-euro countries highlighted the damage the European crisis was already doing to their economies and underlined the urgent need for action by the 17-nation single currency area.

"Europe needs to get its act together because unless the crisis is put to an end, it will start to affect emerging economies which have enjoyed strong growth," Japanese Finance Minister Jun Azumi said.

His Canadian counterpart, Jim Flaherty, said the risk of a global recession would be dramatically higher if next Sunday's European summit failed to deliver.

United States Treasury Secretary Timothy Geithner said he was encouraged that the latest EU moves toward an overall strategy to tackle the two-year-old crisis contained the right elements, notably a recapitalization of European banks.

"They clearly have more work to do on the strategy and the details, but when France and Germany agree on a plan together and decide to act, big things are possible," Geithner said.

The communique urged the eurozone "to maximize the impact of the EFSF (bailout fund) in order to address contagion." EU officials said the most likely option was to use the 440 billion euro (US$611 billion) fund to offer partial loss insurance to buyers of stressed member states' bonds in a bid to stabilize the market.

Source:shanghaidaily