Major emerging powers yesterday stood ready to pledge money to bolster the IMF’s crisis-fighting war chest, though Brazil was holding out for promises that its voting power at the global lender would increase.
Russia said that G20 advanced and emerging countries were ready at a meeting yesterday to commit enough new funds to fulfill IMF managing director Christine Lagarde’s request for at least US$400 billion to draw a line under the eurozone crisis. Russia itself would offer US$10 billion.
“Trust me that the G20 will announce the final amount. This will be an amount that will satisfy the management of the International Monetary Fund,” Russian Deputy Finance Minister Sergei Storchak said.
Support from Russia, China and Brazil is crucial to achieve the doubling of the IMF’s war chest the global lender is seeking. Europe and Japan already have pledged US$320 billion. An international diplomat said that in all, emerging nations have lined up at least US$100 billion.
Enlarging the IMF’s coffers could offer solace to nervous investors that any widening of the eurozone’s debt crisis could be contained. However, Brazil said that as a condition for funds, emerging powers want fresh pledges to recognize their fast-growing global economic weight written into the G20 communique. They are frustrated over delays — particularly by the US — in implementing an agreement to lessen Europe’s sway at the IMF and lift China into the No. 3 voting slot.
“What we want and demand in every meeting is that this commitment be reaffirmed,” Brazilian Finance Minister Guido Mantega said on Thursday after a meeting of officials from the so-called BRICS nations — Brazil, Russia, India, China and South Africa.
Canada, meanwhile, is pushing against Europe’s dominance on the IMF’s 24-member board. It wants to hold two votes when the IMF decides on how to use its new resources — one by eurozone countries and another by others.