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Finance Minister Jim Flaherty and his counterparts in the Group of 20 nations have it within their power to contain the European debt crisis this week.
But only the boldest of gamblers would bet that they will do so. That’s because some of the world’s most powerful countries are locked in a game of chicken, and it’s extremely difficult to guess which ones will blink first.
Economic leaders from the G20 will gather for the first time this year in Mexico City on Saturday and Sunday. As always, the agenda will be full, but one issue will dominate: an international rescue for Europe.
It’s been a touchy subject since the Cannes summit in November, when the non-European members of the G20 turned their backs on European requests for help.
The European Union wanted loans to create a financial backstop that would be big enough to convince bond traders that countries such as Spain and Italy would be saved from collapse.