Tuesday, February 21, 2012

EU leaders to ask G20 to back higher IMF funds

(Reuters) - European Union leaders will call at a summit next week for the world's 20 biggest economies (G20) to agree in April to substantially boost funds available to the International Monetary Fund, draft conclusions of the meeting showed.

The IMF is seeking to more than double its war chest by raising $600 billion in new resources to help countries deal with the fallout of the euro zone debt crisis, but the plan faces resistance from the United States and other countries.

Most G20 countries say the euro zone must first put up more of its own money to resolve its sovereign debt crisis, for example by combining the lending capacities of its temporary and permanent bailout funds, which together would add up to around 750 billion euros of yet uncommitted funds.

Euro zone leaders are to decide whether to combine the two funds' firepower at the summit on March 1-2, which means that G20 finance ministers meeting in Mexico later this week will not be able to take decisions on more cash for the IMF. Read More