Greece's formal request for help in tackling its debt crisis overshadowed a meeting of finance ministers and central bank heads from the world's 20 leading economies today, according to dpa. Government debt was high on the minds of the Group of 20 (bloc) of wealthy and developing countries after the International Monetary Fund warned this week that unchecked public spending could lead to a "debt explosion" in some advanced economies. Greek Prime Minister George Papandreou earlier Friday asked the European Union and IMF to activate an aid package estimated at between 40 billion and 45 billion euros (52-58 billion dollars). Greece's debt woes and its effects on the wider euro-zone have brought the pitfalls of skyrocketing public deficits into sharp focus over the past few months. Finance ministers attending the G20 gathering in Washington sought to reassure that other countries in Europe were not in the same boat. Axel Weber, head of Germany's central bank, insisted the euro-zone remained stable but acknowledged the crisis had the potential to spread. Elena Salgado, finance minister of Spain, one of the countries that has come in for extra scrutiny, insisted Greece was a "special case." The G20 was also to discuss measures to keep the global economic recovery afloat and consider a global levy on banks to avoid massive taxpayer bail-outs in a future financial crisis. The bloc has been divided over introducing a global tax on banks, which is being proposed as part of a broader overhaul of global financial regulation. The tax is favoured by the United States and some Western European countries as they seek to channel public anger against the banking sector in the aftermath of the devastating 2008 financial crisis. But it is opposed by emerging powers like India, which argue it could stifle the development of their own banking sectors. Joerg Asmussen, Germany's deputy finance minister, said his country would push for a bank tax across G20 countries. But he acknowledged a decision was not expected by ministers on Friday. IMF staff added fuel to the fire this week by proposing two separate bank taxes - one a flat tax on all financial firms and another on bank profits. The bloc will also review efforts to bring their economies more in line with each other, a promise made at the last G20 summit in Pittsburgh, Pennsylvania. While the global recovery from last year's recession has been stronger than expected, the IMF this week said the gulf between industrial and developing countries had only widened to date. Emerging powers like China and India are leading the world recovery, their economies even at risk of overheating as investors flood the region with extra capital. The United States, Europe and Japan, meanwhile, face a sluggish recovery in coming years after battling out of their worst recession in generations. IMF chief economist Olivier Blanchard this week said developing powers like China should allow their currencies to appreciate to level the playing field, though exchange rates were unlikely to be a key topic during Friday's G20 gathering. The G20 gathering comes ahead of the semi-annual meeting of the IMF and World Bank's steering committees this weekend.
