Cannes - AFP
Leaders of the world\'s biggest economies urged Europe to put its house in order Thursday, at a G20 summit dominated by a debt crisis which could drag down Italy and force Greece from the eurozone. US President Barack Obama, at the opening of the two-day Group of 20 summit, said the leaders\' top priority was to conquer the European crisis, which has rocked markets and threatens to tip the broader world economy into recession. \"The most important aspect of our task is to resolve the financial crisis here in Europe,\" said Obama after meeting summit host French President Nicolas Sarkozy at the start of the two day meeting in Cannes. Russian President Dmitry Medvedev also called for urgent steps to resolve a crisis that Japanese Prime Minister Yoshihiko Noda warned risks provoking a \"chain reaction\" through the global economy. Already on Wednesday, France and Germany had tried to strong-arm Athens into accepting an EU bailout package as the Greek government tottered on the brink of collapse. Greek Prime Minister George Papandreou triggered a renewed bout of market turmoil this week when he said Athens would put the rescue package agreed only last week to a referendum. G20 host Sarkozy and his German counterpart Chancellor Angela Merkel summoned Papandreou to Cannes late Wednesday to vent their fury over his high-risk referendum gambit. They warned Greece would not receive \"one more cent\" of the International Monetary Fund and EU\'s next planned eight-billion euro ($11 billion) aid installment unless he won the referendum scheduled for December 4. Without the EU-IMF funds, Greece will run out of money within weeks and could face a messy debt default which would force it to leave the European single currency bloc. Nervous investors sent Italy\'s long-term borrowing costs to 6.4 percent, nearing levels unsustainable over the long-term. Stock markets tumbled before being boosted by an unexpected rate cut by the European Central Bank. The warning seemed to work and Papandreou -- back in Athens Thursday and facing a confidence vote in parliament -- said he was prepared to drop plans for the referendum which had sent world markets into a tailspin. However, Merkel kept up the pressure, reiterating the warning it would receive no funds until it approves the rescue package. \"For us, it\'s actions that count,\" Merkel said . \"What\'s important is that there is a quick \'Yes\' to the October 27 decisions.\" EU leaders also put the onus on Greece to stick to the terms of the planned bailout package. \"The euro area stands ready to continue to support Greece but Greece needs to stick to the agreed package ... This needs to be crystal clear,\" EU President Herman Van Rompuy and European Commission chief Jose Manuel Barroso said. Medvedev, meanwhile, urged Greece to take urgent measures that are \"not exotic or populist\" to resolve its debt crisis, warning: \"Countries with excessive debt must urgently begin fiscal consolidation. \"Russia is part of Europe and its problems concern us. We will participate in financial aid programmes in EU countries, at least through the IMF,\" he said. Britain and Australia also promoted IMF involvement, and a source close to the negotiations said leaders were planning to boost the body\'s funding base from next year, China, whose President Hu Jintao dined with Sarkozy late Wednesday, dangled the possibility of contributing $100 billion to Europe\'s bailout fund, but only if they were convinced the investment was safe. The new IMF measure will be included in the final G20 communique Friday, the source said, along with a package of measures to boost growth.