The world's leading economies have pressed the EU to act decisively within eight days to resolve the euro zone's sovereign debt crisis which is endangering the world economy.
In unusually direct language, finance ministers and central bankers of the Group of 20 major economies said they expected a 23 October European Union summit to "decisively address the current challenges through a comprehensive plan".
French Finance Minister Francois Baroin, who chaired the meeting, said Berlin and Paris, the leading euro zone powers, were well on the way to agreeing a plan to reduce Greece's debt, stop contagion and protect Europe's banks.
Non-euro countries highlighted the damage the European crisis was already doing to their economies and underlined the urgent need for action by the 17-nation single currency area.
"Europe needs to get its act together because unless the crisis is put to an end, it will start to affect emerging economies which have enjoyed strong growth," Japanese Finance Minister Jun Azumi said.
His Canadian counterpart, Jim Flaherty, said the risk of a global recession would be dramatically higher if next Sunday's European summit failed to deliver.
British finance minister George Osborne told reporters his continental euro zone colleagues "will have left Paris under no misunderstanding that there is a huge amount of pressure on them to deliver a solution to the crisis".
US Treasury Secretary Timothy Geithner told reporters he was encouraged that the latest EU moves towards an overall strategy to tackle the two-year-old crisis contained the right elements, notably a recapitalisation of European banks.
The communique urged the euro zone "to maximize the impact of the EFSF (bailout fund) in order to address contagion".
EU officials said the most likely option was to use the €440bn fund to offer partial loss insurance to buyers of stressed member states' bonds in a bid to stabilise the market.
Efforts by some countries to increase the IMF's war chest to fight the crisis ran into resistance from the US and others yesterday, burying the idea for now and putting the onus firmly back on Europe.
Mr Geithner said the IMF already had very substantial financial firepower and Washington would support committing more of the existing resources to supplement a well-designed European strategy with more euro zone funding.
Chopra says Europe's politicians must act urgently
Senior IMF official Ajai Chopra told the Kenmare Economics Conference in Co Kerry that Europe's politicians have to move urgently to deal with the problems of the regions banks and sovereign debt.
Mr Chopra said reforms would have to go further than those currently being discussed, and they may require changes to European treaties.
In particular he said Europes' banking industry would have to become more integrated and come under centralised control at EU rather than national level.
Asked about Ireland's performance so far in its bailout programme, Mr Chopra said political and social cohesion around the programme and dealing with the banking problems were starting to pay off in terms of perceptions abroad.
He told the conference that there were signs of life in the Irish economy.
