Show us the fund needs, G20 tells European nations

Without making any firm commitment to bailout debt ridden European countries, the G20 ministers have asked euro-zone nations to reassess the funding needs by March so that a decision could be taken regarding the quantum of support that can be provided by the IMF.

“Euro area countries will reassess the strength of their support facilities in March. This will provide an essential input in our ongoing consideration to mobilise resources to the IMF,” said the communique issued at the end of the two-day meeting of G20 finance ministers and Central Bank Governors.

The ministers of the G20 nations, which include both rich and developing countries, are expected to take a view on enhancing the resources of International Monetary Fund (IMF) at their meeting in Washington in April on the sidelines on the IMF-World Bank Spring Meetings. The G-20 members, the communique said, have been actively engaged in taking the steps needed to safeguard the global financial system and to avoid adverse scenarios.

“We are reviewing options, as requested by Leaders (of the G-20 nations), to ensure resources for the IMF could be mobilised in a timely manner. We reaffirmed our commitment that the IMF should remain a quota-based institution and agreed that a feasible way to increase IMF resources in the short-run is through bilateral borrowing and note purchase agreements with a broad range of IMF members,” it added.

The IMF has been seeking US$600 billion from its members to increase lending resources by US$500 billion in order to protect the European nations from the debt crisis.

The weekend meeting of the G-20 ministers also called for European nations putting in their own resources to strengthen their economy rather than depending on the IMF for funds. Besides Europe and the global economic outlook, the two- day meeting also deliberated on Iran and oil markets and financial reforms.

“We are alert to the risks of higher oil prices and welcome the commitment by producing countries to continue to ensure adequate supply,” the G-20 communique said.