Finance ministers and central bank leaders for the Group of Seven leading industrialized countries will hold a special conference call on Tuesday to discuss the economic problems in the eurozone.

Canadian Finance Minister Jim Flaherty announced late on Monday that the call was slated for Tuesday.

"The real concern right now is Europe of course – the weakness in some of the banks in Europe, the fact they're undercapitalized, the fact the other European countries in the eurozone have not taken sufficient action yet to address those issues of undercapitalization of banks and building an adequate firewall," Flaherty told reporters in Toronto.

Such teleconferences are usually confidential, and the Canadian minister did not say when the discussions between representatives of the United States, Canada, Japan, Britain, Germany, France and Italy would take place. Flaherty said that "some of the non-European members of the G20 who are concerned … with the potential consequences" of the eurozone problems would also take part.

Politicians on the western side of the Atlantic had upped the pressure on their European counterparts Monday, saying further action was needed to calm panicky investors.

"Markets remain skeptical that the measures taken thus far are sufficient to secure the recovery in Europe and remove the risk that the crisis will deepen. So we obviously believe that more steps need to be taken," White House spokesman Jay Carney told reporters in Washington.

Merkel hints at bloc-wide banking authority

German Chancellor Angela Merkel held private talks with EU Commission President Jose Manuel Barroso on Monday evening, saying beforehand that she and Barroso "will also talk about to what extent we have to put systemically [important] banks under a specific European insight."

Merkel also said, however, that this measure could only be a medium-term plan, again appealing for a more unified European economic policy as a precondition for any such move.

"Otherwise, the monetary union cannot function," Merkel said.

Barroso's European Commission had already mooted the idea of a banking union last week.

Lenders in unemployment-hit Spain are currently in the sharpest focus, not least because of the plight of the Bankia S.A. bank, which needs an estimated 19 billion euros ($23.6 billion) in government funds to stay afloat.

The eurozone's 17 members are responsible for overseeing their own banking sectors, with the European Central Bank serving only as the overarching monetary authority. That lender, based in Frankfurt, has already drastically overstepped its previous boundaries during the course of the so-called debt crisis; first agreeing to purchase sovereign debt from troubled countries and more recently distributing over 1 trillion euros in low-interest loans to capital-hungry banks.

President Mario Draghi said last week that the ECB could not "fill the vacuum of the lack of action by national governments."

msh/av (AFP, AP, Reuters)