February 18, 2012
EU Urges G-20, ‘Strong’ States to Bolster IMF to Fight Crisis
The European Union wants Group of 20 nations to pledge more resources to the International Monetary Fund to fight the global financial crisis, the EU said in a planning document prepared for a meeting of G-20 finance chiefs.
Euro-area countries stand ready to provide 150 billion euros ($198 billion) in additional loans to the IMF as part of a broader international effort, the EU said in the draft document for the meeting of G-20 major and developing economies in Mexico City on Feb. 24-26. Other European nations also are ready to assist, the EU said.
“The EU calls on other G-20 countries and other financially strong IMF members to support the efforts to safeguard financial stability by contributing to the increase in IMF resources so as to fill global financing gaps,” the EU said in the document dated Feb. 15 and obtained by Bloomberg News.
The IMF proposed last month to lift its lending capacity by as much as $500 billion to insulate the world against any worsening of Europe’s debt crisis. The U.S. has said it won’t increase its IMF contribution to help the EU.
“The challenge Europe faces is within the capacity of the Europeans to manage, and the administration has been clear with our international partners that we are not seeking additional funding for the IMF,” Lael Brainard, the Treasury’s undersecretary for international affairs, told U.S. lawmakers yesterday.
Euro-area finance chiefs are slated to meet Feb. 20 to consider a 130 billion-euro aid package for Greece. Europe is set to make “all the necessary decisions” on that day, Luxembourg Prime Minister Jean-Claude Juncker said this week, while cautioning that further commitments would be required for the deal to move forward.
The G-20 probably won’t reach a consensus on the amount it could designate for aid to Europe during next week’s finance ministers meeting, Mexico’s Finance Minister Jose Antonio Meade said earlier this month. While increasing assistance to help Europe’s liquidity is a “relevant” topic for the G-20, it is too soon to expect details on how to strengthen the IMF and other international organizations, Meade said.
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