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Six weeks to save the euro: Chancellor's warning after another day of financial turmoil


World leaders were warned last night that they have just six weeks to save the euro from collapse.

On another day of gathering economic gloom, George Osborne savaged eurozone leaders for failing to get a grip on their towering debts.

The Chancellor set a deadline of six weeks – when leaders of the G20 group of leading countries will meet for crunch talks in France – for action. 

He said: 'Patience is running out in the international community. There is a sense from across the leading lights of the eurozone that time is running out for them.

'The eurozone has six weeks to resolve this political crisis.'

Mr Osborne also signalled dramatic plans to prop up Britain's faltering economy, opening the door for a  rescue plan that would see the  Bank of England lend directly to struggling small businesses.

In other developments:

IMF chief Christine Lagarde said the challenge facing the world 'could not be more urgent';
World markets remained dangerously volatile, with Britain's leading firms seeing £78billion wiped off their value this week;
• The G20 insisted it would take necessary steps to try to stop the eurozone crisis spreading;
• Debt-laden Greece admitted for the first time that an 'orderly default' was an option;
• Economists at the Royal Bank of Scotland predicted that Europe is falling back into recession.

There is a growing expectation in Whitehall that the Bank of England will authorise another emergency injection of cash into the economy with a second round of 'quantitative easing' – essentially, printing money.

As much as £300billion is expected to be flooded into the economy despite the risk that it will push inflation still higher, increasing the cost of living.

The Bank has already poured £200billion into the economy to try to bolster growth, but there have been renewed calls for another dose of the medicine.

Mr Osborne, in Washington, signalled that he is open to the idea of the Bank ring-fencing some of the cash for direct loans to small or medium-sized firms that are in urgent need of help to expand or simply keep afloat.

1 Comments in Response to

Comment by Treavor Presentlyinphoenix
Entered on:

It hit me. Just six more weeks of Holiday shopping! Just 6 more days of our special extended holdover sale at Penny's. We're getting hit with a warmed over retail marketing campaign.

What I'm gonna track is how long until this washes down into the wholesale and job-lot phase. 6 months after that it hits final liquidation on Ebay and 6 months after that it hits the thrift stores.

Then I might actually be able to afford bailing out the Euro.

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