S.Korea urges Europe "self-rescue" efforts before IMF resource hike

SEOUL Feb 9 (Reuters) - South Korea said on Thursday that Europe should take decisive steps to resolve its debt problems before the Group of 20 leading economies approve a move to boost resources of the IMF to help countries deal with the fallout from the crisis.

"In this process, full-fledged self-rescue efforts should be preceded at the European level, to prevent moral hazard disputes," Finance Minister Bahk Jae-wan said in a prepared speech at an international seminar in Seoul, though he added the resource increase would "hopefully" be concluded soon.

The International Monetary Fund estimates it needs $600 billion more to limit the fallout from the crisis, but countries such as the United States and Canada have insisted that no promises can be made until Europe announces new measures of its own to contain the mess and prevent it from spreading.

Mexican Finance Minister Jose Antonio Meade also said on Wednesday that G20 finance ministers were unlikely to reach a deal to boost IMF resources at their Feb. 25-26 meeting in Mexico City.

Bahk said despite the recent agreement by the European Union leaders on a new fiscal compact and an early introduction of the European Stability Mechanism, "the high financial inter-linkages and complex political interests within the euro zone" are making it difficult to fundamentally resolve the crisis.

Greek leaders failed on Thursday to agree on reforms and austerity measures, the price of a bailout to avoid a messy default, forcing Finance Minister Evangelos Venizelos to go to the country's financial backers with an incomplete deal.

Greece's partners in the European Union and the International Monetary Fund are increasingly exasperated by a lack of agreement on the measures they demand in return for a 130 billion euro ($172 billion) bailout and time is running out for the country before a major March 20 bond redemption. (Reporting by Yoo Choonsik; Editing by Kim Coghill)