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EU Leaders Welcome Greece's Move to Scrap a Referendum on Bailout

European Commission President Jose Manuel Barroso, left, and European Council President Herman Van Rompuy arrive at a G20 meeting in Cannes, Thursday, Nov.3, 2011.

European leaders welcome Greek Prime Minister George Papandreou's decision to scrap a referendum on a bailout deal. The Greek and larger eurozone crisis are dominating the Group of 20 summit meeting in the Riviera city of Cannes.

French President Nicolas Sarkozy said European leaders are in talks with the United States and other countries and institutions to expand a bailout fund for larger eurozone economies like Italy, which are teetering on the brink. Looking tired and harassed at an afternoon press conference, he described the atmosphere among leaders at this G20 summit as serious.

Sarkozy said the leaders agreed to better coordinate their political and economic policies against the threat of another economic slowdown. But the Greek crisis and its spreading fallout is dominating their agenda. Following talks with Mr. Sarkozy earlier Thursday, President Barack Obama said resolving the European financial crisis was the most important task of this two-day meeting.

In Athens, Prime Minister George Papandreou backtracked from his decision to hold a referendum on a European bailout deal following a strong rebuke from France and Germany.

Sarkozy said Greece was a sovereign country, but Europe's two biggest economies had a duty to step in when it came to defending the 17 nations sharing the euro currency. European leaders are reportedly discussing for the first time a possible Greek exit from the eurozone to save it.

G20 heads of state also received a plea from Microsoft chief and philanthropist Bill Gates not to forget the poorest nations as they cut spending in the face of a slowing economy.

"I don't have the solutions for them [the short-term issues], but they do need to address that," said Gates. "But, in doing so, they do need to keep in mind that the one percent or so of government budgets that go to helping the poorest, you know, I believe that should be maintained, and even grown."

Sarkozy is also pushing G20 leaders to increase their assistance to poor countries, partly through a controversial proposal to tax financial transactions.