Leaders from the G20 may have agreed to boost flagging growth but hours after their pledge Japan announced it was in recession. Sonia Legg looks at the impact of the news on a struggling Europe and asks what more needs to be done.
Europe's markets don't like shocks and Japan's slip into recession made traders in Germany shudder. Shares fell as fears of a revived conflict in Ukraine also had an impact. Robert Halver is from Baader Bank. (SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "We know that Putin won't just give in and the West is stubborn as far as sanctions are concerned. This does not help the world economy." G20 leaders had made growth a headline over the weekend. They announced a package of measures to add an extra 2.1 percentage points to global growth over five years. But the good news was quickly overshadowed. The prospect of new sanctions against Russia over Ukraine emerged again after Putin left the G20 meeting early. (SOUNDBITE) (German) GERMAN CHANCELLOR, ANGELA MERKEL, SAYING: "First, we support Ukraine both politically and economically. Second, we shall spare no effort to promote a diplomatic solution to the conflict. And third, we will impose economic sanctions against Russia to the extent that is necessary and for as long as they are needed." Merkel is well aware the sanctions are also hurting Europe, particularly Germany. But Rabobank's Jane Foley says they don't appear to be letting that influence them. (SOUNDBITE) (English) JANE FOLEY, SENIOR FX STRATEGIST, RABOBANK, SAYING: "It did seem that the leaders did take a very firm stance with Putin at the G20 meetings regarding Russia's position with Ukraine and it does seem that that challenge is certainly one that unifies the G20 leaders right now." Britain's David Cameron is worried though. He's warning the global economy is at risk of slipping back into crisis as the euro zone and emerging economies slow and geopolitical risks rise. Red lights, he said, were once again flashing on the dashboard.