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Gordon Brown says France and Italy may need bailout | |
(about 1 hour later) | |
Gordon Brown has warned that France and Italy may need to be bailed out like Spain because of the unfolding eurozone crisis. | |
The former UK prime minister said it was not only Greece, Portugal and Ireland facing the threat of euro exit. | The former UK prime minister said it was not only Greece, Portugal and Ireland facing the threat of euro exit. |
But, he added, some of the EU's largest countries such as France, Spain and Italy were also at risk. | But, he added, some of the EU's largest countries such as France, Spain and Italy were also at risk. |
Mr Brown also warned that Germany might have to seek additional funding to safeguard its banks. | Mr Brown also warned that Germany might have to seek additional funding to safeguard its banks. |
In a stark warning ahead of next week's G20 summit in Los Cabos, Mexico, Mr Brown said: "The euro area is finally approaching its own day of reckoning." | |
The former PM said, in a blog for Reuters, that "we are in a downward spiral that shows no sign of ending." | |
He accused EU leaders of adopting "well-meaning half measures." | He accused EU leaders of adopting "well-meaning half measures." |
"If there is a failure of global leadership next week [at the G20], not only will Europe be condemned to a lost decade but the whole world will pay a fearful price." | "If there is a failure of global leadership next week [at the G20], not only will Europe be condemned to a lost decade but the whole world will pay a fearful price." |
The G20 summit is a meeting of 19 countries plus the European Union, which between them account for 80% of global gross domestic product and 80% of global trade. | |
As host, Mexico's President Felipe Calderon wants the summit to concentrate on how to reduce food price volatility, promote green growth, and boost investment in scientific and agricultural technology. | |
But in truth, the eurozone crisis is likely to overshadow proceedings, with all eyes on Germany as the potential answer to the region's debt crisis. | |
Germany 'not immune' | Germany 'not immune' |
Mr Brown accused eurozone leaders of seeking to "wish away" Spain's banking problems by providing only 100 billion euros of credit when their banks had two trillion euros of liabilities. | Mr Brown accused eurozone leaders of seeking to "wish away" Spain's banking problems by providing only 100 billion euros of credit when their banks had two trillion euros of liabilities. |
Mr Brown also predicted that Italy and France may have to follow Spain in seeking a rescue package for their banks. | Mr Brown also predicted that Italy and France may have to follow Spain in seeking a rescue package for their banks. |
"Even German banks," he said, "which are some of the most highly leveraged, are not immune from needing more capital." | "Even German banks," he said, "which are some of the most highly leveraged, are not immune from needing more capital." |
Mr Brown said "the final showdown" could be postponed but eurozone leaders had to accept "the inescapable logic" of a fiscal union. | Mr Brown said "the final showdown" could be postponed but eurozone leaders had to accept "the inescapable logic" of a fiscal union. |
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