CANNES, France, Nov 3 (Reuters) - Leaders of the Group of 20 leading economies are discussing how to protect major euro zone economies Italy and Spain from being drawn deeper into the bloc’s debt crisis, an Indian official said on Thursday.
“There are talks at the G20 on the effects of the Greek crisis and there are now discussions on throwing a financial firewall around countries like Italy and Spain which are very big economies in the zone,” Montek Singh Ahluwalia, Deputy Chairman of India’s Planning Commission, told Reuters.
He was attending the G20 summit in the French resort town of Cannes.
“The euro zone has admittedly a structural flaw. It’s a monetary union per se without any fiscal coordination and that is why what they are now evolving... is introducing a more intrusive form of fiscal surveillance for member states, forced consultations if something goes off track and more sophisticated signalling procedures.”
Italy and Spain are the euro zone’s third and fourth biggest economies respectively. They have struggled increasingly in recent months to hold down borrowing costs as financial markets anticipate they will be forced to follow Greece, Ireland and Portugal into seeking bailouts.