Sigh of relief at G20 summit over Greek election results

Los Cabos, Mexico: The emerald-green lawns of the time-share condos and all-inclusive resorts seem to gleam in the bright sun as the surf rolls gently against the white-sand beaches of Los Cabos. Sometimes the only noise is the ruffling of palm fronds in the languid ocean breeze. It’s an idyllic place to thrash out the terrifyingly uncertain fate of Europe and the global economy. Leaders of the world’s largest economies began to assemble Sunday in this Baja California desert resort just as Greece’s pro-bailout New Democracy party won the national elections, a vote for the financial status quo that could keep panic under control at least for now. A vote against the pro-bailout party could have forced Greece to leave the joint euro currency, a move that would have had potentially catastrophic consequences for other ailing European nations and the global economy. Most European leaders were on the long flight to Los Cabos, or put off their travel until the results were in, but the politicians and businessmen already in Los Cabos appeared deeply relieved. [caption id=“attachment_347135” align=“alignleft” width=“380” caption=“A voter in Greece’s sunday election. Reuters”]  [/caption] “The Greek people have spoken,” European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso said in a joint statement. “We salute the courage and resilience of the Greek citizens, fully aware of the sacrifices which are demanded from them to redress the Greek economy and build new, sustainable growth for the country. As the pair indicated, the path ahead for Greece, and by extension the bigger economies of Italy and Spain, remains unclear and market turmoil could erupt again at virtually any time. Spanish Prime Minister Mariano Rajoy lauded the Greek vote while speaking to reporters in Mexico on Sunday, saying “we have improved a lot since we’ve entered the euro.” “What’s happened in Greece is good news,” Rajoy said. “The Greek citizens have done the right thing. The European Union is going to help Greece, because the European Union is and must be a joint project that seeks the well-being and the material improvement of all European citizens.” Before the latest Greek results came in, Christine Lagarde, head of the International Monetary Fund, was grim-faced as she addressed the B-20 meeting of world business leaders running up to Monday’s G20. She beseeched the businessmen to exert their influence and pressure world leaders to address the “mission-critical” priority of restoring investor confidence in the world economy. “Be as blunt as you can with the G20 leaders,” she said. “Prioritise and indicate what in your view, in the view of the investors around the world … is critical as far as you are concerned to restore confidence.” US President Barack Obama, set to arrive Sunday night, and the summit’s host, Mexican President Felipe Calderon, have been downplaying expectations for the summit Obama is seeking bolder, swifter signals from Europe that it will contain its financial mess and keep it from torpedoing the US economy and his re-election chances along with it. Calderon has given a more optimistic message, including that he expects the G20 to produce record donations to the International Monetary Fund, exceeding member states’ pledges of $430 billion this year and bolstering its ability to conduct more bailouts in Europe. There were, however, clear signs of deep divisions over this relatively straightforward measure. Calderon said the US would decline to contribute, a decision in line with Washington’s position that more IMF money would be a de-facto US bailout of Europe. It was unclear how much money would come from emerging economies such as Brazil and India, which have been pushing for more say in the governance of the IMF in exchange for greater contribution. AP