Some leaders at last week’s G20 summit in Cannes, France, suggested resorting to the IMF’s own notional currency to support the crucial EU bailout fund, Germany said on Saturday.
The German government promptly rejected the idea, which involved resorting to the Special Drawing Rights (SDR) — an international reserve asset created by the IMF in 1969 and based on a basket of international currencies — to increase the firepower of the European Financial Stability Facility (EFSF).
“Some Cannes participants brought up the issue as to whether SDRs might be used to boost the EFSF’s efficiency,” government spokesman Steffen Seibert said.
According to yesterday’s Frankfurter Allgemeine Zeitung, several G20 participants wanted central banks to contribute 50 billion euros to 60 billion euros (US$69 billion to US$83 billion) in SDRs to finance a beefed-up EFSF.
The Welt Am Sonntag said the Bundesbank saw it as an attack on its sovereignty.
It was the Bundesbank’s opposition to the plan that led to German Chancellor Angela Merkel’s veto.