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IMF head Christine Lagarde talks to India's Finance Minister Pranab Mukherjee, right, next to Reserve Bank of India deputy Governor Subir Gokarn during the G20 finance meeting in Paris on Saturday. Charles Platiau/AP/Press Association Images

G20 urges Eurozone leaders to come up with 'comprehensive plan'

A summit of Eurozone leaders next Sunday is expected to be decisive for the long-term economic prospects of the region.

G2O FINANCE MINISTERS left a summit in Paris at the weekend demanding that the Eurozone sort outs its problems and comes up with a credible, long-term solution to the region’s debt crisis.

The Eurozone has committed to finalising details of “a comprehensive plan” to recapitalise banks, solve the Greek issue and shore up its bailout fund ahead of a crucial summit on Sunday, the Financial Times reports.

The G20 leaders released a joint statement after their meeting to express encouragement at what progress was being made, adding that it was important for Eurozone leaders to act “decisively address the current challenges through a comprehensive plan” at the summit on 23 October, Reuters reports.

Three key measures expected from the EU summit will be a plan for the recapitalisation of European banks so as that they are able to cope with any further market turmoil, a long-term solution to the Greek debt crisis and the bolstering of the European Financial Stability Fund (EFSF).

On the markets, shares across Europe have opened positively on the expectation that a comprehensive deal will be worked out.

In London, the FTSE is up 1.21 per cent at the time of writing. In Paris the CAC 40 is up 1.27 per cent and the DAX is up over 1.5 per cent. On the Irish Stock Exchange, the ISEQ index is up nearly 1.5 per cent.

Meanwhile the outgoing European Central Bank president Jean-Claude Trichet has urged stronger governance of the Eurozone while calling for changes to the European Union’s treaty in order to prevent one member state from destabilising the rest.

Quoted on Reuters, Trichet told French radio Europe 1 and iTele television that he expected governance rules would be applied much more rigorously in future to prevent a repeat of the current crisis.

It is his belief this could be done without a treaty change but asked if a treaty change would mean getting rid of members states’ veto, he said: “To do this, one even needs to be able to impose decisions.”

Read: IMF’s Chopra says link between state and banks led to Ireland’s ‘crippling downward spiral’ >

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