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Osborne hails debt crisis resolve

Chancellor George Osborne has warned that the global economic crisis has reached a "dangerous phase", but he hailed progress in agreeing emergency action.

He said finance ministers are "optimistic that we have taken a step towards resolving it" following crunch talks in Washington DC.

International Monetary Fund (IMF) officials said they have been encouraged by the willingness of eurozone governments to do what is necessary.

They said the situation remains "precarious", but they noted a "very clear recognition by ministers of the gravity of the situation we are in".

Speaking after the talks, Mr Osborne said: "I think there is a recognition here that the debt crisis has reached a dangerous phase. But we are optimistic that we have taken a step towards resolving it.

"The countries of the eurozone, which are at the epicentre of this crisis, understand that they need to take decisive action and that the rest of the world is there ready to help them. We are making progress but there are still a lot of challenges ahead."

On Friday, the Chancellor said eurozone countries had just six weeks to devise a long-promised solution to the crippling debt crisis, suggesting a meeting of the G20 nations in France in November is the deadline for action.

He insisted no specific plan had been put forward to deal with a Greek default, amid reports that G20 ministers had privately accepted that it is likely to happen.

"No one here has put forward a plan for a Greek default," he told Sky News. "Greece has its programme. Its got to meet its conditions but it is also clear that the eurozone has to deal decisively with their issues.

"At this meeting we have seen the eurozone understand that they are at the epicentre of this global debt crisis, that it has entered a dangerous new phase and that the sooner we resolve it the better for the whole global economy."

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