Monday, October 24, 2011

Gillard urges action on eurozone crisis

Prime Minister Julia Gillard has urged European leaders to take decisive action to resolve the continent's debt issues, saying "these are critical days".

Addressing the Commonwealth business forum in Perth, Ms Gillard says she will be telling the G20 summit in Cannes next week that "there is no time for delay" to ensure Europe's private banks are properly capitalised.

"G20 leaders will need to strike the right balance between addressing short-term risks and pledging reforms that promote growth into the future," Ms Gillard said.

"I have written to the French president and 2011 G20 chair Nicolas Sarkozy urging decisive action in Cannes."

Her strongly worded speech was made as global pension fund adviser Towers Watson warned of the chance of a full-blown economic depression brought on by the European debt crisis.

Towers Watson head of global investment Roger Urwin says the eurozone is a fragile institution at the moment, and this is one of the factors increasing the risk of a depression.

"A series of relatively weak political responses, and what we seem to refer to all the time these days as kicking the can down the road, have led to the problems of sorting out Greece and of course the potential for this to be a contagion through to Italy and Spain," Mr Urwin said.

Ms Gillard said the G20 Action Plan will need to "outline the commitments and measures" required to achieve stronger economic growth.

She urged the cost of remittances sent home from Europe by people from the trouble and drought-ravaged Horn of Africa be lowered.

"The G20 also needs a strong development agenda, particularly in areas such as food security, infrastructure and remittances," she said.

"The crisis in the Horn of Africa reminds us of the urgency of addressing the challenge of global food security, and Australia supports a comprehensive approach.

"I will be advocating strongly for G20 leaders to commit to reducing the costs of sending remittances.

"The needs of the developing world must be central to the G20 agenda, not something peripheral or remote."

Ms Gillard urged the Commonwealth business leaders to "ensure the next phase of world growth is very different to the last".

"[There must be] greater balance and less debt; rebuilding our cities and our infrastructure; freer trade and fewer barriers."

She called for "less attention to creating exotic financial products and more to creating the goods and services that sustain real growth".