U.S. Said to Have No Plans for Loans to IMF in Euro Crisis
The U.S. has no plans to make bilateral loans to the International Monetary Fund to help stem the European debt crisis, a Treasury Department official said.
The IMF has ample resources, said the official, who declined to be identified as a condition for holding the briefing with reporters in Washington today. The fund has about $400 billion in uncommitted resources, the official said.
European finance ministers said this week they would seek a greater role for the IMF alongside their own bailout fund in their bid to tame the euro region’s sovereign-debt turmoil. Several countries including Brazil and Mexico have said they are ready to help boost IMF resources.
The Treasury official said that if other countries make bilateral contributions it doesn’t have any implications for the U.S. The European Central Bank has been and must remain central to the response to the crisis, the official said.
U.S. Treasury Secretary Timothy F. Geithner will travel to Europe next week for meetings with political leaders and central bankers as they prepare for a summit on the continent’s worsening debt crisis. The Treasury official said President Barack Obama asked Geithner to take the trip.
Geithner will meet French President Nicolas Sarkozy, Italian Prime Minister Mario Monti and European Central Bank President Mario Draghi during his Dec. 6-8 trip, the Treasury Department said in a statement today. He will return to Washington before the Dec. 9 summit in Brussels.
May Not Suffice
IMF chief Christine Lagarde has indicated that the $390 billion the IMF currently has available for lending may not suffice should the global outlook worsen.
Lagarde said yesterday that Group of 20 nations are prepared to boost the fund’s resources as the European debt crisis threatens the global recovery.
“If circumstances require, the G-20 will commit the resources that are necessary for the IMF to play its systemic role,” she said during a press conference with Brazilian Finance Minister Guido Mantega in Brasilia. “That gives you a range that is almost without a cap, without a limitation.”
A European proposal to channel central bank loans through the IMF may deliver as much as 200 billion euros ($268 billion) to fight the debt crisis, two people familiar with the negotiations said.
At a Nov. 29 meeting attended by Draghi, euro-area finance ministers gave the go-ahead for work on the plan, said the people, who declined to be named because the talks are at an early stage. The need for a new crisis-containment tool emerged as the effort to boost the 440 billion-euro rescue fund to 1 trillion euros fell short.
To contact the reporters on this story: Ian Katz in Washington at ikatz2@bloomberg.net; Sandrine Rastello in Washington at srastello@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
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