Investors want global leaders meeting in Mexico next week totake action on reviving economic growth, the Institute ofInternational Finance said.

“Markets will be looking expectantly for evidence of a globallycoordinated policy response targeted to revive growth prospectsworldwide on a sustainable basis,” IIF Managing Director CharlesDallara said in a letter today to leaders attending the Group of 20summit in Los Cabos, Mexico, on June 18-19.

The summit will give European leaders a chance to discusseconomic concerns with heads of other major economies, includingU.S. President Barack Obama. European governments are more focusedon building a consensus for another summit they are holding laterthis month, a U.S. official said yesterday on condition ofanonymity.

Europe's 100 billion-euro ($126 billion) bailout last weekend ofSpain's banks showed “evidence of a willingness to take collectiveand coordinated action,” Dallara said. The bailout was a “vitalnear-term crisis-fighting measure” and highlights the potentialbenefits of allowing the European Stability Mechanism, or ESM, torecapitalize banks when needed, he said.

French President Francois Hollande has called for the ESM to beused to recapitalize banks, the French daily Le Monde reported.

Greek Election

Dallara said a new Greek government following June 17 electionsshould “reaffirm its commitment to the central tenets of its reformprogram — liberalizing labor and product markets, advancingprivatization, and strengthening the competitiveness of the economywith a greater focus on fiscal and structural reforms.”

Greece votes a second time in six weeks after a May 6 ballotfailed to yield a government. The Syriza party has promised toabrogate the terms of the 240 billion-euro ($303 billion) bailoutfrom the European Commission, European Central Bank andInternational Monetary Fund, which calls for cuts that riskdeepening the country's worst recession since World War II.

“Europe absolutely needs to chart a course” to be able to “moveout of this lurch, crisis-to-crisis mode,” Dallara said at a newsconference in Washington today.

The IMF “is likely going to have to play a more active role insupporting the European efforts,” he said. “A bit of ingenuity andcreativity may be needed because the IMF remains well-positioned toplay a supportive role.”

The Washington-based IMF could coordinate a fund to helpcountries provide job training to reduce unemployment, Dallarasaid.

Dallara said last week that he plans to step down as managingdirector this year.

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