Friday, February 3, 2012

IMF says the Fund 'should boost its resources as Europe discusses debt crisis'

The International Monetary Fund should proceed with talks on increasing the size of its warchest at the same time as Europe discusses how to build a firewall to contain its debt crisis, a senior official from the fund said on Friday.

Emerging countries understand the need to boost the IMF's resources as Europe's debt crisis threatens the global economy, IMF Deputy Managing Director Naoyuki Shinohara said, signalling expectations that developing nations will contribute more money.

The IMF could face a difficult negotiating task, because some emerging economies could chafe at the idea of bailing out wealthier European countries without reassurances that the euro zone can draw a line under its two-year old debt crisis.

"Talks to boost the regional firewall and the global firewall in terms of the IMF's financial base need to proceed in parallel," IMF Deputy Managing Director Naoyuki Shinohara told Reuters in an interview.

"There is a broad agreement among countries about the overall framework. Based on this, discussions have begun about how much each country will contribute and the modality."

"At present, we have started talks with countries to see how many countries are willing to contribute and if they would, in what way," Shinohara told a news conference.

"Countries, including emerging nations, understand the need to boost a global institution such as the IMF at a time when Europe's problems could affect countires outside the euro zone in a major way," Shinohara said when asked about emerging nations' roles.