Russian President Dmitry Medvedev met IMF Managing Director Christine Lagarde in Moscow today after Russia agreed to channel funds through the Washington-based lender. Russia expects agreement on higher membership quotas in return, the Kremlin said in an e-mailed statement before the meeting. Lagarde will travel to China tomorrow.
European policy makers are looking beyond their borders to help more than double the size of their 440 billion-euro ($604 billion) rescue fund to 1 trillion euros. The BRICS group of emerging economies, comprising Russia, China, Brazil, India, Brazil and South Africa, discussed aid for the euro zone last week at the Group of 20 summit in Cannes, France.
“We have the opportunity now to exchange views on the world economy following the G-20 summit,” Medvedev told Lagarde at the start of the meeting. “I would like to wish you success because, as it turns out, the world now depends to some extent on how the IMF functions.”
World leaders at the meeting balked at writing new checks for the euro region’s bailout, demanding the currency-sharing area’s governments first do more to fix the two-year-old debt crisis. They demanded more details of a rescue package before committing fresh cash to the IMF.
The BRICS group is prepared to take part in a “common effort” of helping Europe cope with the crisis, Russian Foreign Minister Sergei Lavrov said in Moscow today at a joint briefing with his Irish counterpart, Eamon Gilmore.
The BRICS will decide on a “financial contribution” to the fund in the “coming weeks,” Arkady Dvorkovich, Medvedev’s economic adviser, said Nov. 4.
Russia is ready to provide assistance through the IMF beyond an existing $10 billion commitment, Dvorkovich said. Russia and its BRICS partners in return are seeking sufficient voting power to “influence key decisions” at the IMF, he said.
The IMF is increasing quota shares for major emerging economies, which “are claiming legitimately more space at the table,” Lagarde said in a speech at Moscow’s State University of the Ministry of Finance after meeting Medvedev. “That shift is painful, laborious, and is being done over time.”
Emerging nations have urged an end to the convention of naming the IMF’s head from Europe and World Bank presidents from the U.S. Lagarde, a former French finance minister, was appointed to the IMF job in June after Frenchman Dominique Strauss-Kahn quit the post.
“The IMF is cautious, which is why there is bargaining.” Masha Lipman, an analyst at the Moscow Carnegie Center, told Bloomberg Television in an interview today. “BRICS nations are saying they will commit funds to Europe. However, they want higher quotas, they want bigger representation in the IMF.”
The IMF was formed after World War II to help stabilize the currencies and economies of member states and lends to countries in financial strife.
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