IMF boost sought, but no accord reached
Source: Agencies |
November 5, 2011, Saturday
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Print Edition
Print Edition
LEADERS of the world's 20 most powerful economies failed to agree on how to increase the firepower of the International Monetary Fund so that it can help stem the European debt crisis, though they acknowledged its resources should be boosted.
The leaders struggled to reach concrete resolutions at their summit in the French resort of Cannes that has been overshadowed by Greece's political turmoil and worries about Italy, which accepted IMF supervision of its economic reform efforts.
"It's important that the IMF sees its resources reinforced," Jose Manuel Barroso, president of the European Commission, told reporters.
He said the increased resources would be there to help countries around the world, not just the eurozone, indicating Europe is struggling to attract extra help from its global partners for its debt crisis. German Chancellor Angela Merkel said no countries outside the eurozone had committed any money to the region's bailout fund.
Barroso said several countries had indicated they would provide bilateral loans to the IMF, which would give the fund more resources without collecting money from reluctant members like the United States.
The G20 final statement said the IMF should work in the next three months on a special account that could be earmarked for the eurozone.
That way countries like the United States, which think Europe should pay for its own financial problems, wouldn't have to put any money in. And countries like Russia and Brazil, which have expressed interested in helping the eurozone, could.
The statement also said the IMF should work out a way to issue more special drawing rights, or SDRs, the fund's own reserve currency that can be exchanged for cash with central banks around the world. SDRs can just be created and do not require new commitments from IMF member states.
Finance ministers will now have to work out the details of these measures. French President Nicolas Sarkozy said the G20 would next deal with the topic in February.
With their own finances already stretched from bailing out Greece, Ireland and Portugal, and traditional allies like the United States wrestling with their own problems, eurozone countries were looking to the IMF to use its resources and rescue experience to help prevent the debt crisis from spreading.
"Every day that the eurozone crisis continues, every day it isn't resolved, is a day that has a chilling effect on the rest of the world economy," British Prime Minister David Cameron said.
The leaders struggled to reach concrete resolutions at their summit in the French resort of Cannes that has been overshadowed by Greece's political turmoil and worries about Italy, which accepted IMF supervision of its economic reform efforts.
"It's important that the IMF sees its resources reinforced," Jose Manuel Barroso, president of the European Commission, told reporters.
He said the increased resources would be there to help countries around the world, not just the eurozone, indicating Europe is struggling to attract extra help from its global partners for its debt crisis. German Chancellor Angela Merkel said no countries outside the eurozone had committed any money to the region's bailout fund.
Barroso said several countries had indicated they would provide bilateral loans to the IMF, which would give the fund more resources without collecting money from reluctant members like the United States.
The G20 final statement said the IMF should work in the next three months on a special account that could be earmarked for the eurozone.
That way countries like the United States, which think Europe should pay for its own financial problems, wouldn't have to put any money in. And countries like Russia and Brazil, which have expressed interested in helping the eurozone, could.
The statement also said the IMF should work out a way to issue more special drawing rights, or SDRs, the fund's own reserve currency that can be exchanged for cash with central banks around the world. SDRs can just be created and do not require new commitments from IMF member states.
Finance ministers will now have to work out the details of these measures. French President Nicolas Sarkozy said the G20 would next deal with the topic in February.
With their own finances already stretched from bailing out Greece, Ireland and Portugal, and traditional allies like the United States wrestling with their own problems, eurozone countries were looking to the IMF to use its resources and rescue experience to help prevent the debt crisis from spreading.
"Every day that the eurozone crisis continues, every day it isn't resolved, is a day that has a chilling effect on the rest of the world economy," British Prime Minister David Cameron said.
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