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Mexican president promises to push for more IMF funding at G-20 in response to European crisis
MEXICO CITY (AP) ' Mexico will use the impending G-20 summit to push the world's largest economies to increase the resources of the International Monetary Fund and build confidence in the fund's ability to help European countries shaken by financial crisis, President Felipe Calderon said Tuesday.
The IMF and European Union have already spent billions in bailouts of Ireland, Greece and Portugal and IMF head Christine Lagarde has been seeking increased funding. The Obama administration has said it doesn't want to contribute.
Calderon says he expects significant progress toward a lasting solution to the crisis at the summit, which takes place as many governments and banks struggle to find enough funding in the face of market fears about the health of their balance sheets. Financial officials begin meeting Friday in the coastal resort of Los Cabos, and national leaders will start assembling two days later
Calderon told reporters that as the host country Mexico will work to achieve a long-term plan with concrete measures to spur economic growth and increase the funding available to countries that need cash. He said that would include increasing the funding of the International Monetary Fund.
"We'll be looking for this meeting, under the leadership of Mexico, to strengthen and establish concrete commitments to strengthen international institutions, particularly the International Monetary Fund, so that it is a strong and flexible tool for confronting the economic crisis," Calderon said.
A day before the G-20 summit, Greeks are voting in a national election that could bring to power a party that rejects the condition of the country's bailout, throwing into uncertainty Greece's future participation in the shared Euro currency. Markets are frightened by the ramification of the crisis' spread into the far larger economies of Italy and Spain, which tapped billions in bailout funds for its struggling banks over the weekend. The IMF has described increased funding as a way of building a firewall that would block spread of the crisis into economies whose collapse would be catastrophic.
Calderon said meetings of financial ministers in the run-up to the G-20 summit had, despite a lack of formal consensus, produced a sense of evolving agreement that "what's needed is the immediate construction of a way of providing sufficient financial support, the so-called firewalls, that would allow us to dissipate any doubts about countries' abilities to fulfill their financial commitments."