Foreign pressure mounted on Europe's leaders to quickly get control of the eurozone crisis Wednesday, with China, the World Bank and the United States all making calls for concerted action.The stark situation over the spiraling sovereign debt crisis saw the leaders of Germany, France and Greece consult by teleconference while France's top banks earned ratings downgrades over their exposure to Greek bonds.
China's Prime Minister Wen Jiabao said European governments needed to "put their own house in order," while the International Monetary Fund's board of directors held an "informal" meeting to discuss the Greek debt problem.
An international banking group cited "lack of determination" in Europe's leadership, and World Bank President Robert Zoellick labelled the 17 nation eurozone as irresponsible for running a monetary union without any fiscal discipline.
"The global economy has entered a new danger zone with little running room as European countries resist difficult truths about the common responsibilities of a common currency," Zoellick said in a speech at George Washington University in the US capital.
"It is not responsible for the eurozone to pledge fealty to a monetary union without facing up to either a fiscal union that would make monetary union workable or accepting the consequences for uncompetitive, debt-burdened members."
US Treasury Secretary Timothy Geithner expressed confidence in Europe's leaders but also urged them to take firm action to strengthen confidence in the region.
"They recognize they are going to have to do more, they recognize they have been behind the curve," in dealing with the debt crisis.
"They have to move more quickly," he said, adding that advancing reform in Europe "does not work unless it is supported with money."Amid growing worries that Greece will default on its massive debts and drive cracks into the 12-year-old eurozone, French President Nicolas Sarkozy and German Chancellor Angela Merkel held a tele-summit with Greece's Prime Minister George Papandreou on finding a way forward.
Afterwards, Sarkozy and Merkel issued a statement insisting that they "are convinced that the future of Greece is in the eurozone."
"The Greek prime minister confirmed his absolute determination to put in place all the necessary measures to carry out all of the commitments made," the statement said.
But doubts continued to be raised over whether the leaders of Europe's two most powerful economies could rise to the challenge.
David Marsh, an expert on the eurozone said Wednesday that the "dramatic" resignation last week of Germany's top representative at the European Central Bank -- which he called the region's only institution equipped to deal with the crisis -- showed how deep the problems among policymakers are.Marsh, co-chairman of the Official Monetary and Financial Institutions Forum, said Germany's push for more austerity from Greece in exchange for bailout funds were making the problem worse."You drive yourself into the ground through this type of austerity," he said in an Atlantic Council-organized conference call.
"It's almost inevitable that Greece will have to default," he said, predicting "We are heading toward a breakup of the euro."The leading global bank lobby, the Institute of International Finance, criticized "parochialism and nationalism being exhibited" in Europe's economic policy debates, in a letter published Wednesday.
The Washington-based group hit out at "the lack of determination of national leaders in certain cases to tackle fiscal problems with conviction, and by the lack of euro-Area institutional infrastructure to facilitate coherent and timely decision-making in an integrated fashion.""Swift and decisive action could do much to gain crucial market support, and could also catalyze international support from countries outside the Euro Area -- both for the reform efforts of Greece and for other troubled Euro Area countries," the letter added.