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The Globe and Mail

G7 finance ministers vow European action as Spain fears mount

Canada's Finance Minister Jim Flaherty at at meeting of the Globe and Mail's editorial board on April 27, 2012.

Roger Hallett/The Globe and Mail

A conference call of G7 finance ministers concluded with promises of further European action over the coming weeks to calm markets as concern now focuses on the Spanish economy and its fragile banking sector.

The discussion among finance ministers and central bank governors focused on potential policy responses, "including the progress towards financial and fiscal union in Europe," according to a brief statement released by Finance Minister Jim Flaherty's spokesperson. The statement was virtually identical to one issued earlier Tuesday by the U.S. Treasury.

Both Mr. Flaherty and Bank of Canada Governor Mark Carney took part in the conference call.

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Japanese finance minister Jun Azumi said the ministers discussed the situation in Europe.

"The European side stated that they will respond to it speedily," he said, according to reports.

The private call was never officially announced, but Mr. Flaherty disclosed it would take place while speaking with reporters on Monday.

The next summit of G20 leaders – to take place later this month in Los Cabos Mexico – is once again shaping up as a deadline of sorts for European leaders. The planned agenda of last year's G20 summit in Paris was largely derailed by Euro zone politics as European leaders grappled with Greece's plan – later retracted – to hold a referendum on Europe's bailout conditions.

The G20 summit will take place just days after the June 17 Greek election, in which voter decisions between pro and anti-bailout parties could hasten that country's exit from the euro zone.

Spain is now the most pressing concern, as the region's fourth-largest economy admitted for the first time Tuesday that it will need European help to shore up its banking sector.

Prime Minister Stephen Harper, who is in London for the Queen's diamond jubilee celebrations, will be in Paris Wednesday to meet with French President François Hollande.

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With a report from Jeremy Torobin

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