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Yang, however, made no mention about increasing investment in Europe in his statement late on Saturday on President Hu Jintao's trip to the G20 leaders' meeting in southern France.

"We believe that Europe has the complete wisdom and ability to solve the debt problem," Yang said in remarks published on the Foreign Ministry's website.

"China has always supported Europe's response to the international financial crisis and its economic recovery efforts," he said.

The euro zone has been looking to China play a role in supporting its rescue fund by investing some of its $3.2 trillion in foreign exchange reserves -- the world's largest.

But there are limits to what Beijing can actually deliver, Cheng Siwei, a former top Chinese lawmaker, said on Saturday, even though China is willing to help Europe, its largest export market, to deal with the debt crisis.

Leaders of the world's major economies, meeting on the French Riviera, told Europe to sort out its own problems and deferred until next year any move to provide more crisis-fighting resources to the International Monetary Fund.

Yang said that Hu emphasized during his trip "the development and the recovery of the European economy to achieve recovery" of the global economy.

(Reporting by Sui-Lee Wee; Editing by Sanjeev Miglani)

"It looks like we're going to have yet another meeting ... The consensus view (among the G20) is that we cannot wait that long (until February meeting in Mexico). We do need to restore market confidence," Canadian Finance Minister Jim Flaherty said during a panel discussion in Berlin.

G20 leaders failed at a summit in Cannes this week to secure new money from potential investors such as China and Brazil for efforts to overcome the euro zone debt crisis, which continues to unnerve financial markets as political turmoil in Greece has jeopardised a new Greek bailout agreement and Italy's high debt has become a focus of market attention.

German Chancellor Merkel said there was a lot of work to be done to solve the crisis and it could take a decade before the euro zone was in a better situation.

"(It will) certainly take a decade until we are in a better position again," Merkel said in her weekly podcast on Saturday. "We have a whole chunk of work ahead of us, I've got to say."

In Greece, Prime Minister George Papandreou, who survived a confidence vote on Friday but is expected to step down, said negotiations to form a coalition government would start soon. He called for a broad-based government to secure a bailout from the euro zone, the main weapon in Europe's battle against the spreading economic crisis.

While euro zone leaders have pressed China to put money in the currency bloc's bailout fund, an influential adviser to China's government said on Saturday that Europe should not count on Beijing.

"China certainly hopes the debt crisis could be resolved. If the crisis spreads, it could lead to a break-up of the euro zone and affect the global monetary system as the euro is the second-largest reserve currency," Cheng Siwei, a former top Chinese lawmaker, told reporters in Beijing.

"But don't pin high hopes on China. China cannot be a hero to the rescue," he said. "China will lend a helping hand within its capacity but Europe must rely on itself.

Merkel said all of Europe had overspent for years but welcomed that all euro zone members had agreed to a debt brake like Germany's.

"Almost all European countries have spent more over the years than they earned," she said.

(Writing by Susan Fenton)

"If we observe that our interventions are undermined by a lack of efforts by national governments then we have to pose ourselves the problem of the incentive effect," Mersch said according to extracts of an interview with Italian daily La Stampa to be published on Sunday.

Asked if this meant the ECB would stop buying Italy's bonds if it did not adopt reforms it has promised to the European Union, Mersch, who heads Luxembourg's central bank, replied:

"If the ECB board reaches the conclusion that the conditions that led it to take a decision no longer exist, it is free to change that decision at any moment. We discuss this all the time."

Since the ECB resumed its bond buying programme (SMP) around three months ago it has purchased some 100 billion euros of government bonds, a majority of which are thought to be Italian BTPs.

Mersch said the ECB did not want to become a lender of last resort to help the euro zone solve its debt crisis and said it was concerned that its job could be made more difficult by governments that "don't meet their responsibilities."

"Our job is not to remedy the errors of politicians," he said.

Mersch also defended the right of Italian Lorenzo Bini Smaghi to remain on the ECB board even though this means Italy now has two members and France has none, much to the annoyance of French President Nicolas Sarkozy.

"He (Bini Smaghi) has an eight year mandate, the treaties do not say that if someone comes from a specific Treasury ministry he has a right to a place on the ECB board," he said.

"The spirit of the treaties is that everyone leaves his passport in the wardrobe when he participates in ECB meetings."

(Reporting By Gavin Jones)

Gary Gensler, the chairman of the Commodity Futures Trading Commission, and Jon Corzine, who recently resigned as MF Global's chief executive, worked at Goldman Sachs Group Inc at the same time and held prominent positions. They both left the investment bank in the late 1990s.

"I don't know if there is an official recusal but he's said he's not going to participate in the MFG inquiry. He's done with it," said a source who has participated in meetings on MF Global.

Gensler has not participated in meetings during the last few days, and has chosen to not participate in the review because he doesn't want to create an appearance of a conflict of interest, the source said.

U.S. regulators have launched an investigation into MF Global as they search for more than $600 million in missing customer money. The FBI also has shown a preliminary interest in regulatory probes looking into the missing funds.

MF Global filed for bankruptcy protection on Monday after risky trades on European debt triggered its collapse.

The decision by Gensler comes as Republican Senator Charles Grassley on Friday called on the CFTC chief to recuse himself from matters related to MF Global.

"MF Global's case is a big collapse that requires a lot of work from the commission to try to figure out what went wrong and minimize further investor losses if possible," Grassley said in a statement.

"It's hard to see how the commission chairman could be completely objective in looking out for wronged investors when he has such strong ties to the principal of the failed firm," he said.

(Additional reporting by Karey Wutkowski in Washington; Editing by Sanjeev Miglani)