'Don't Blame Europe For Crisis' Says EC Chief

The President of the European Commission has attacked critics of the eurozone's crisis management as the International Monetary Fund (IMF) raises more cash for its war chest.

After facing renewed calls for Europe to find a resolution, Jose Manuel Barroso spoke out declaring that "the crisis originated in North America" with the collapse of real-estate-linked financial products.

He also took what was seen as a subtle dig at China and other non-democratic countries at the summit in Mexico. "Not all the members of the G20 are democracies but we are democracies and we take decisions democratically. Sometimes this means taking more time," he said.

"Frankly we are not coming here to receive lessons in terms of democracy or in terms of how to handle the economy, because the European Union has a model that we may be very proud of."

He was speaking as the IMF announced a further $456bn (£290bn) for its euro crisis war chest - on top of the $430bn (£274bn) announced in April.

The so-called "Brics" - Brazil, Russia, India, China and South Africa - were among the contributors.

Tackling the euro crisis has so far dominated the G20's talks in Los Cabos.

Despite the victory of a pro-euro party in Greece's elections at the weekend, there has not yet been an announcement on the formation of a government in Athens.

Prime Minister David Cameron urged Greece's centre-right New Democracy party to move "decisively and swiftly" to form a new administration, warning that "delay could be deadly".

But he acknowledged the crisis in the eurozone could rumble on "for some time" and made clear that he is looking elsewhere in the world for trading partners to replace lost demand from the UK's traditional export markets in Europe.

There are growing signs of impatience among non-eurozone G20 nations.

World Bank chief Robert Zoellick said: "We are waiting for Europe to tell us what it's going to do."

One senior diplomat said the eurozone faces "a long, hard road that has got to be travelled" before its problems are over.

And Jose Angel Gurria, the head of the Organisation for Economic Co-operation and Development (OECD), said the crisis was "the single biggest risk for the world economy".

Mr Cameron repeated his call for "core" eurozone states like Germany, as well as the European Central Bank, to take the decisive steps towards fiscal and banking union which he believes are necessary for the euro to function properly.

The Prime Minister said G20 members in the Pacific resort town are putting "constructive pressure" on Germany.

But he acknowledged that Chancellor Angela Merkel faces political difficulties at home in delivering economic changes which could see German taxpayers making regular payments to support less competitive nations like Greece.

"We have to understand the German difficulties. It is very difficult politically to take the steps that are required economically," said Mr Cameron.

"But nonetheless if you want a functioning single currency you have to take at least some of those steps. You need to have elements of banking union, fiscal transfers and so on."

Mr Cameron said the eurozone faced three alternatives, the most positive of which would involve "action to strengthen the eurozone, to make it more coherent".

Failure to take these steps would mean that "dominoes start to fall, which would have very severe financial consequences across the world and would seriously affect us", he said.

But he made clear that he was taking seriously the possibility that the eurozone will take "enough financial action and just enough political and economic action to keep the show on the road but without solving the fundamental problems", leading to the risk of "perpetual stagnation".

And he indicated that part of Britain's preparations for such an outcome involved building trade links with emerging economies like Mexico.

"It may be that the eurozone crisis is going to continue for some time, in which case the UK must do all it can to put its own house in order and link up with the fastest-growing parts of the world," said the PM, who has brought a 25-strong trade delegation of British companies to Mexico.