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G20 meeting wraps with call for swift EU action

At the end of a meeting of G20 leaders in Mexico City, finance chiefs warned that global economic growth could be threatened if EU policy reforms stall. Germany and Britain also called for tougher global tax standards.

(L-R) Organisation for Economic Co-operation and Development (OECD) Secretary General Angel Gurria, Mexico's Finance Minister Jose Antonio Meade and World Bank President Jim Yong Kim pose for photographers after a news conference as part of the G20 meeting in Mexico City November 4, 2012. The G20 meeting of finance ministers and central bank governors will take place from November 4 to 5. REUTERS/Edgard Garrido (MEXICO - Tags: POLITICS BUSINESS)

G 20 Finanzminister in Mexiko

The two-day meeting came to a close on Monday, with finance chiefs from the Group of 20 releasing a statement highlighting the importance they placed on the swift implementation of reform in the European Union.

"Global growth remains modest and downside risks are still elevated, including due to possible delays in the complex implementation of recent policy announcements in Europe," the statement read.

"Current reform momentum in the EU on structural, fiscal and financial fields needs to be continued with the view to improving competitiveness and promoting financial stability."

The G20 also cited the potential for sharp fiscal tightening in the US as a possible strain on global economic growth. The US is approaching a "fiscal cliff" in January, when automatic spending cuts and tax hikes will come into effect unless Congress and the White House can come up with compromise before then.

"Everything must be done ... to negotiate the fiscal cliff in such a way that it does not result in any major additional damage or difficulties for the global economy," said German Finance Minister Wolfgang Schäuble.

Tougher tax standards

Britain and Germany issued a joint statement on Monday urging world economies to tighten tax standards for multinational companies, in an effort to close legal loopholes that can be used to circumvent payment.

Schäuble and George Osborne said they expected "widespread support" for their joint initiative.

"We want to make sure that we are successful economies which are the home of international businesses but that international businesses pay the taxes that we expect them to pay," Osborne told reporters in a joint news conference with Schäuble.

Tax revenue for major companies has come into sharp focus in the past month, with figures for Facebook, Starbucks and Apple all coming under severe scrutiny.

"Britain and Germany want competitive corporate tax systems that attract global companies to our countries, but also want global companies to pay those taxes," Schäuble and Osborne wrote in their joint statement. "That is best achieved through international action in the G20 and other relevant international fora to ensure strong standards."

A German finance ministry official said that France was also backing the drive, with Germany and Britain hoping to push the plans forward during Russia's presidency of the G20 next year.

mz/dr (AFP, AP, dpa, Reuters)