Fears of global recession as Italy teeters on brink

 

On a day of unremitting gloom and yet more market turbulence, the Greek Prime Minister, George Papandreou, won a late-night confidence vote in parliament after making a speech in which he promised to start power-sharing talks to form a caretaker coalition government. Although he won the vote, 153-145, he is expected to step down, with a national unity government likely to take over. In a sign that the spread of the debt crisis to Italy could break up the single currency, the British Chancellor, George Osborne, admitted Treasury was undertaking crisis planning for a euro zone collapse. The British Prime Minister, David Cameron, hinted at worse to come, saying this was only ''a stage of the global crisis''. There had been hopes that the G20 would agree to increase IMF resources by as much as $US250 billion to more than $US1 trillion, but disagreements about the wisdom of doing so, its structure, size and the contributors to the fund forced world leaders to pass on the issue to a meeting of G20 finance ministers in February. In financial markets an early rise in share prices was reversed after it became clear that divisions in the G20 would prevent a deal in Cannes

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