6 Jun 2012

G7 finance chiefs consult

8:53 am on 6 June 2012

Finance chiefs of the G7 group of industrial nations have held emergency talks about the eurozone debt crisis.

They're particularly concerned about whether Spain may need a bailout for its stricken banks.

Even Spain's finance minister Cristobal Montoro has admitted that markets have effectively given up lending to the country.

Cristobal Montoro told Onda Cero radio that "the door to markets is not open for Spain".

Bankia alone needs 23 billion euros to shore up its balance sheet, and Close Brothers Seydler head trader Oliver Roth says pressure is increasing on Europe and Germany to help out.

Private sector activity in the eurozone fell in May. German output fell for the first time in six months, while declines in Spain and France accelerated.

The BBC reports there is speculation that Europe is still split over whether to launch common bonds to help ease borrowing costs.

But German finance minister Wolfgang Schaeuble repeated Germany's position at the weekend that fiscal union must precede the introduction of eurobonds.