IMF doubles its funds, warns Europe
Finance ministers from emerging countries over the weekend joined Europe in doubling the coffers of the International Monetary Fund (IMF), while asking for a bigger say in its governance and warning the eurozone to speed up anti-crisis measures.
Chaired by Singapore's finance minister Tharman Shanmugaratnam, the IMF meeting on Saturday (21 April) concluded that "continued progress" in the eurozone is needed to lower the borrowing costs of governments and "secure financial stability."
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"Undertaking bold structural reforms will be crucial to boosting confidence and productivity, facilitating rebalancing within the monetary union, and promoting strong and balanced growth," the final communique says.
For his part, US treasury secretary Timothy Geither noted that more action is needed from the European Central Bank (ECB).
"The success of the next phase of the crisis response will hinge on Europe's willingness and ability, together with the European Central Bank, to apply its tools ... aggressively to support countries as they implement reforms," he said.
The Frankfurt-based ECB has already poured €1 trillion worth of cheap loans into eurozone banks to prevent a credit crunch and to allow them to buy more government debt, a move which temporarily lowered Spain and Italy's borrowing costs.
IMF chief Christine Lagarde on Friday managed to raise €326 billion extra for her institution's general intervention budget. The money could be used for further euro-bail-outs.
The US and Canada declined to chip in. Meamwhile, in return for their - so far unspecified - extra contributions, Brazil, China, India and Russia want a bigger say in the way the IMF takes its decisions.
Brazil's finance minister Guido Mantega pointed out that even though his country could be described as the third largest economy in Europe behind Germany and France, its voting power at the IMF is equivalent to the Netherlands and smaller than Spain, Italy or Britain.
The UK also said that its €11 billion contribution will only become available once IMF reforms are completed.
"I take reforms one step at a time," Lagarde told reporters on Saturday. "Everybody wants to have a bigger share of the same pie, so there will have to be give and take."