Greek voters to decide euro fate
Filed under: News
European Commission president Jose Manuel Barroso insists the single currency and the "European project" are both irreversible.
But former prime minister Gordon Brown claimed the prospect of a "chaotic" Greek exit from the eurozone is growing more likely regardless of the election result. And he warned next week's G20 summit in Mexico is the "last chance" to sort out the single currency crisis.
European leaders pledged last night to take the "necessary action" needed to secure global economic stability in a video conference call with David Cameron setting the groundwork to the meeting of leading economies.
Germany is expected to come under intense pressure from G20 members outside the eurozone to take decisive action to stabilise the single currency by pushing forward with moves towards fiscal union.
Speculation is mounting that central banks, including the Bank of England, Bank of Japan and US Federal Reserve, are preparing to launch emergency support measures to cushion the blow of an implosion in the eurozone following the elections in Greece.
Its exit from the euro could lead to contagion across the eurozone and beyond as the impact of a collapsed banking system and debt default in Greece spreads like a domino effect.
German chancellor Angela Merkel, President Francois Hollande of France and Italian premier Mario Monti are expected to delay their travel to the Pacific resort of Los Cabos until Monday in order to be in place to deal with the immediate aftermath of the Greek poll results, expected to be declared late tomorrow.
The 13-hour flight to Mexico means that the leaders will be in the air as the markets respond to the results on Monday morning, though Mr Cameron will be in touch with London via satellite phone.
Mr Cameron and Chancellor George Osborne have been saying for several months that the "remorseless logic" of monetary union means closer fiscal integration for the 17 eurozone states.
Berlin is resisting proposals such as eurobonds, which would spread the risk from debt across the entire eurozone, effectively allowing wealthy Germany to underwrite the debts of countries like Greece and Spain.
Ms Merkel has cautioned world leaders against "overestimating" her nation's ability to resolve the crisis.
No resolution to the eurozone crisis will emerge from Los Cabos, but it is expected to provide an important staging post towards a settlement of some kind at the European Council meeting in Brussels on June 28.