“Markets will be looking expectantly for evidence of a globally coordinated policy response targeted to revive growth prospects worldwide on a sustainable basis,” IIF Managing Director Charles Dallara said in a letter Thursday to leaders attending the Group of 20 summit in Los Cabos, Mexico, on Monday and Tuesday.

The summit will give European leaders a chance to discuss economic concerns with heads of other major economies, including U.S. President Barack Obama. European governments are more focused on building a consensus for another summit they are holding later this month, a U.S. official said yesterday on condition of anonymity.

Europe’s 100 billion-euro ($126 billion) bailout last weekend of Spain’s banks showed “evidence of a willingness to take collective and coordinated action,” Dallara said. The bailout was a “vital near-term crisis-fighting measure” and highlights the potential benefits of allowing the European Stability Mechanism, or ESM, to recapitalize banks when needed, he said.

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

Greek Election

Dallara said a new Greek government following June 17 elections should “reaffirm its commitment to the central tenets of its reform program -- liberalizing labor and product markets, advancing privatization, and strengthening the competitiveness of the economy with a greater focus on fiscal and structural reforms.”

Greece votes a second time in six weeks after a May 6 ballot failed to yield a government. The Syriza party has promised to abrogate the terms of the 240 billion-euro ($303 billion) bailout from the European Commission, European Central Bank and International Monetary Fund, which calls for cuts that risk deepening the country’s worst recession since World War II.

“Europe absolutely needs to chart a course” to be able to “move out of this lurch, crisis-to-crisis mode,” Dallara said at a news conference in Washington Thursday.

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

The Washington-based IMF could coordinate a fund to help countries provide job training to reduce unemployment, Dallara said.

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