Australia’s PRIME Minister Julia Gillard and South Korean President Lee Myung-bak have issued a joint statement urging “resolute action” by Europe to address uncertainty in the global economy.
Ms Gillard and Mr Lee will be among the G20 nation leaders to gather in the Mexican resort city of Los Cabos Today and Tomorrow.
“We need a clear message from Europe that it is taking decisive steps to stabilise and strengthen its banks,” they said.
“A crucial element of restoring confidence in Europe is agreement on a roadmap for the eurozone to underpin its monetary union by a fiscal union and a banking union.”
Ms Gillard landed in Los Cabos on Sunday, where she will address a B20 business forum being held in the sidelines of the leaders’ summit.
The eurozone debt crisis will dominate the G20 summit.
All eyes will be on Greece on Sunday as its people go to the polls to determine whether to endorse a conservative government committed to economic and fiscal reform or a popular radical left administration which would likely see an exit from the euro.
Mr Lee and Ms Gillard backed Spain’s acceptance of financial assistance, saying Europe should move quickly to ensure that its banks are “adequately capitalised and backstopped” because the health of the banking sector is key to economic growth and reducing some of the risks preoccupying markets.
“Europe must have credible fiscal consolidation plans to restore fiscal sustainability, but it is also essential that it has a strategy for growth that includes policies aimed at boosting investment, freeing up product and labour markets, deregulating business, promoting competition and building skills,” they said.
They said the G20 summit should make progress in the process of reforming the International Monetary Fund, including increasing IMF resources by more than $US430 billion ($A430 billion), and ensuring the agency’s governance structure reflects “the shifts in economic influence”.
Australia last year pledged to double its IMF commitment.
“Economic growth and new jobs are crucial to improving people’s livelihoods both now and for future generations … the world is expecting the G20 to deliver,” they said.