EUROPEAN LEADERS came under pressure from the United States yesterday to calm the debt crisis by deploying “unequivocal financial force” to support weak economies.

As G7 finance ministers and central bankers gathered in Marseille amid fresh concerns over Greece and fears of a new recession, US treasury secretary Timothy Geithner warned that European leaders had “a lot more to do” to “demonstrate to the world they have the political will” to protect troubled euro zone members.

He said Europe’s debt crisis was a “significant cause” of the slowdown in the US economy, and urged Europe’s leaders to back up their reforms with “very, very powerful, unequivocal financial force”.

“It is completely within the capacity of the stronger members of the euro area to absorb those costs,” Mr Geithner said. “Those costs would be much, much greater for their economies if they were to sit here and do nothing.”

Any expectations of a single co-ordinated response from the G7 after several weeks of market turmoil were dampened even before the talks began, with France insisting there was no one-size-fits-all solution to the current problems.

French finance minister François Baroin, who is hosting the two-day summit, alluded to differences over how to strike the balance between cuts and stimulus, adding: “Some are in favour of a uniform action. I’m inclined to look for what is best adapted to each country’s situation.”

The OECD said this week that growth across the G7 could slow to 0.2 per cent in the last quarter of 2011, and urged the bloc to send a clear signal of its readiness to take action if growth slows further.

Any grand initiatives such as those seen at the height of the credit crunch in 2009 were ruled out by several delegations yesterday, however. Mr Geithner said the current challenges were different and “cannot realistically be confronted by a repeat of that co-ordinated global response of financial stabilisation and fiscal and monetary stimulus”.

US president Barack Obama on Thursday responded to a sluggish summer for the US economy by unveiling a larger-than-expected $447 billion jobs package, but Washington appeared to be going it alone. Germany and Britain – the only two of the large European economies that have not faced bond market pressures in recent months – have insisted their fiscal consolidation will continue, while Canadian finance minister Jim Flaherty said slowing that process too much would be foolish. “I hope we would all agree we have to stay the course, that we have to go through the pain of fiscal consolidation,” Mr Flaherty said.

On her way to yesterday’s summit, Christine Lagarde, the head of the IMF, urged leaders to take “bold action” to steer their economies though “this dangerous new phase of recovery”.

Ms Lagarde gave her blessing to more quantitative easing by central banks and said the challenge was to find a pace of adjustment that was neither too fast nor too slow. She said countries facing market pressures must push ahead with urgent fiscal consolidation, while there was scope for slower action in countries not at the mercy of market forces.

“If growth continues to lose momentum, balance sheet problems will worsen, fiscal sustainability will be threatened, and the scope for policies to salvage the recovery will disappear,” she warned.

Fears the global economy may be in its most difficult period since the collapse of Lehman Brothers bank gave added significance to the G7 summit, while news of the imminent early resignation of ECB executive board member Jürgen Stark, which reached Marseille shortly after the summit began, added to the sense of uncertainty. The euro fell and shares tumbled in Europe and on Wall Street during the day.

EU economic and monetary affairs commissioner Olli Rehn played down concerns about the Continent’s banks, however. “We’re not in the same kind of situation . European banks are much better capitalised. Of course there are challenges in terms of bank funding, but the ECB continues to provide liquidity.”