Tue, Feb 21, 2012 - Page 10 News List

Japan, China to help Europe solve crisis via IMF

Bloomberg and AFP, Washington

Japanese Minister of Finance Jun Azumi said his nation and China are committed to help resolve the European debt crisis through the IMF once eurozone members take further steps themselves.

“We shared the view that Europe needs to make more efforts to create a bigger firewall,” Azumi told reporters in Beijing on Sunday after meeting Chinese Vice Premier Wang Qishan (王岐山). “We also agreed to act together as the IMF will probably ask the US, Japan and China to help boost their lending capacity.”

Europe needs a bigger so-called firewall of added funding to contain the crisis, even as Greece shows some improvement in solving its woes, the Japanese finance chief said.

“Japan and China are prepared to support the IMF’s important role in addressing the European sovereign debt crisis, on the basis of further efforts by the EU and euro area members and in cooperation with G20 and IMF members,” according to a statement issued by the Japanese Ministry of Finance on Sunday after Azumi and Wang met.

China is willing to get “more deeply” involved in resolving Europe’s debt crisis and the continent must send a clearer message to show how it is working to strengthen its finances, Chinese Premier Wen Jiabao (溫家寶) said at a joint press conference on Tuesday last week in Beijing with EU President Herman Van Rompuy.

US Secretary of the Treasury Timothy Geithner has thrown Washington’s support behind the new austerity measures agreed by Greece and said the US backed the idea of a new IMF loan for Athens.

“We welcome the program of economic reforms agreed to by the prime minister of Greece and the coalition parties and the public statement of support from the major economies of Europe,” Geithner said in a statement on Sunday. “This is a very strong and very difficult package of reforms, deserving of support of the international community and the IMF. The United States will encourage the IMF to support this agreement.”

The Greek parliament has approved a series of measures worth 3.2 billion euros (US$4.2 billion) in return for a second bailout deal that would write off 100 billion euros of debt and provide a loan of 130 billion euros to Greece.

Eurozone finance ministers were expected to finalize the deal in Brussels yesterday in a bid to try to save Greece — which has already been granted a 110 billion euro rescue package — from bankruptcy.

The IMF, which in May 2010 gave Greece a 30 billion euro loan as part of the first bailout, has remained silent in recent months on the idea of a new loan. Its member states are divided on whether to continue financing a country that has not respected its financial commitments.

The G20 in April 2009 decided to triple the fund’s resources as part of plans to pull the world out of recession. At that time, the US and Japan each contributed US$100 billion, the EU US$178 billion and China US$50 billion.

The EU wants G20 nations to pledge more resources to the IMF to fight the global financial crisis, according to a planning document prepared for a meeting of G20 finance chiefs and central bankers on Saturday and Sunday.

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