24 February 2012

Bloomberg: Europe faces pressure as G20 mulls IMF role

The US, Chinese and Japanese will press euro area countries to do more to merit outside help when the world's largest economies gather for a meeting dominated by Europe's sovereign debt woes, just days after Greece secured a second bailout.

With demand from the European Union’s 500 million consumers slowing, China and Japan have signaled a commitment to help resolve Europe’s debt woes. The condition is that Europe “make more efforts to create a bigger firewall”, Japanese Finance Minister, Jun Azumi, said. Japan is considering contributing $50 billion to the IMF’s European rescue package, the Asahi newspaper reported on February 23, without saying where it obtained the information.

The US administration “has been clear with our international partners that we are not seeking additional funding for the IMF”,  Lael Brainard, the Treasury’s undersecretary for international affairs, said. The US wants “additional steps” to be taken by Europe “to strengthen the firewall”, Jay Carney, White House press secretary, told reporters in Washington on February 21.

IMF Managing Director, Christine Lagarde, is looking for an additional $500 billion in lending resources for the Washington-based fund. The 17 euro nations have pledged about $200 billion in new money.

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