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World Economy

Emergency talks aim to soothe market turmoil

Financiers from the Group of 20 major economic powers held emergency talks early Sunday to discuss the twin debt crises in Europe and the US, whilst ministers from the G7 major economies were also to hold an emergency session on how to calm the markets before they reopen on Monday.

The Warsaw Stock Exchange building is seen in Warsaw, August 5, 2011.  Stock markets in central Europe fell to at least one-year lows on Friday.
The Warsaw Stock Exchange building is seen in Warsaw, August 5, 2011. Stock markets in central Europe fell to at least one-year lows on Friday. Reuters/Kacper Pempel
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Worries over debt in the eurozone and the US sovereign downgrading sent world stock exchanges into freefall this week.

The European Central Bank was also due to hold an emergency session Sunday on whether to start buying Italian debt in an effort to avoid contagion of the eurozone crisis.

Italy, following Spain, is the latest country to unnerve investors.

Both countries are currently paying a 14-year high on their government bond repayments, causing concern that they will be unable to honour their debts while economic growth is so slow.

High levels of debt coupled with low growth in both countries has sparked fears Italy and Spain could become engulfed in the same cycle which led to Greece, Ireland and Portugal already being bailed out.

Last week, European Commission President Jose Manuel Barroso said authorities in the eurozone were failing to prevent the sovereign debt crisis from spreading.
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