Without the US, Ms Lagarde will try to secure a deal between the other major non-eurozone members – the UK, Canada, Japan, Australia, China and India. China and Japan have indicated a willingness, but a deal will need to be unanimous among the big players for the UK to sign up.
Ms Lagarde hinted last week that the increase in resources will be smaller than initially hoped, saying the "needs now may not be quite as large".
The 17-member eurozone has already agreed to contribute €150bn to the IMF, on top of its own €800bn bail-out fund. The UK has pledged £29.5bn to the IMF, £5.5bn of which has been ploughed into eurozone rescue schemes.
The Government has the authority to commit another £10bn without a vote in Parliament. The Chancellor has stressed that the UK would only commit the money if there were "no new vehicles or funds specific to the eurozone".
Economists hope that the bigger the bail-out fund, the less likely it is to be used.
on that note , let's see what we can discern from public statements....
http://www.panarmenian.net/eng/news/103165/
Fund to help strengthen a global firewall against contagion from the European sovereign debt crisis, AFP reported citing Kyodo news agency.
Tokyo is talking with some other key members of the IMF such as China and European nations to finalise their possible contributions to the multilateral lender, ahead of the Group of 20 finance chiefs' meeting later this week in Washington.
If realised, Japan's contribution could be one of the biggest by a member nation, Kyodo quoted an unnamed government official as saying.
China is expected to offer a similar amount, leading other emerging economies, some of which are still calling for additional efforts by European leaders to help themselves.
Japan, the second-biggest stakeholder in the IMF after the United States, has shown readiness to lead relevant discussions at the IMF and G-20, as the US government has shown reluctance to be aggressively involved in any fresh IMF resources boost, Kyodo said.
Tokyo has welcomed the recent decision by eurozone finance ministers to temporarily increase their bail-out funds to 700 billion euros ($915 billion) from 500 billion to prevent contagion from the fiscal problems in Greece, Ireland and Portugal spreading to bigger members such as Spain and Italy, the report said.
here's what Canada has to say....
http://www.reuters.com/article/2012/04/12/canada-europe-idUSL2E8FCEF020120412
(Reuters) - Canada is not interested in contributing to a bailout fund to help Europe deal with its debt crisis, a spokesman for Prime Minister Stephen Harper said on Thursday.
Canada wants Europe to do more to help itself before offering fresh resources through the International Monetary Fund. The IMF said in January it would need an additional $500 billion to lend and another $100 billion for reserves to erect an adequate safeguard against the risks posed by the euro zone's crisis.
Leaders at the Americas summit in Colombia are expected to discuss the
euro zone problems, spokesman Andrew MacDougall told reporters in a briefing.
Here is a comprehensive look at the challenges Lagarde faces.....
http://newsfeedresearcher.com/data/articles_b16/lagarde-fund-need.html
While euro nations have pledged to pitch in 150 billion euros ($US231 billion), the U.S., the fund's largest shareholder, has refused to join in.With European governments' recent move to increase their crisis defenses, Lagarde said she hopes to make "real progress" on getting additional funding when the IMF's 187 member nations meet in Washington next week. While data indicate economic improvement in economies such as the U.S., she singled out a worsening of the European debt turmoil as the largest risk to global growth. "Let us make no mistake, the risks and the needs are still sizable and it would be very imprudent to ignore that fact," she said at the Brookings Institution. [1] In January, the IMF estimated it would need an additional $500 billion to lend and another $100 billion for reserves to erect an adequate safeguard against the risks posed by the euro zone's crisis. Both advanced and emerging economies, including Japan and Canada, have said they want Europe to do more to help itself before they offer fresh resources to help. Lagarde said she was not concerned about building up IMF resources for the euro zone but for countries outside the region that could face fallout. "A stronger global firewall will help complete the 'circle of protection' for every country," she said at the Brookings Institution. [2] In a January speech in Berlin, Lagarde discussed raising that total by up to an additional US$500 billion, bringing the IMF's resources for lending close to US$1 trillion. Her comments suggested that the IMF might need less, though she cautioned that even with recent gains, the global economy still faced many threats. "But let me also underline this point: The risks remain high, the situation fragile." Asked whether she had a new figure in mind to replace the US$500 billion, Lagarde said she was "not fixed on a number yet" but hoped the discussions next week would help resolve the question. The 187-nation IMF and its sister lending institution, the World Bank, will hold their spring meetings in Washington at the end of next week. Those discussions will be preceded by a meeting of finance ministers and central bank presidents of the Group of 20 major industrial countries. Those nations represent about 85 per cent of the global economy. [3] The meetings of the IMF's 187 member countries next week will be dominated by discussions on new IMF resources, growing concerns Europe's crisis could widen to Italy and Spain, and slowing growth in major emerging markets, including China. Lagarde said the IMF was reassessing risks to the global economy, and how actions taken by Europe to address its crisis may have tempered them. "The needs now may not be quite as large as we had estimated earlier this year," she added. [4] Stronger protection for the world economy is needed against Europe's debt crisis, the head of the global lender has said. IMF chief Christine Lagarde said she was not concerned about building up IMF resources for the eurozone itself - which has 'breathing space' thanks to some successful policy moves - but for countries outside the region that could face fallout. 'A stronger global firewall will help complete the 'circle of protection' for every country,' she said at the Brookings Institution. [5]
The "Iron Ladies' of the European debt crisis, German Chancellor Angela Merkel, and IMF Chief Christine Lagarde have clashed to the joy of tweeterers. Russia stands ready to provide loans to the International Monetary Fund to boost its bailout resources, but wants other countries to provide financial help too, says Finance Minister Anton Siluanov. The IMF has warned it may not be able to rescue bigger European economies struggling with their debt. [6] BRUSSELS The world's 20 biggest economies are likely to agree to increase the resources of the International Monetary Fund by between $400 and $500 billion, rather than the $600 billion initially sought by the IMF, Group of 20 officials have said. The extra money is to give the IMF, which is a lender of last resort to governments, more firepower to fight the sovereign debt crisis, triggered by unsustainable policies in euro zone countries such as Greece, Portugal and Ireland. G20 finance ministers meet next week in Washington to discuss the IMF's call for more resources from January after the euro zone increased the size of its own crisis-fighting funds in March in response to G20 pressure. [7] JEDDAH: The Kingdom and other new members of G20 should ask for more voting power at key global groupings such as the International Monetary Fund, a top Saudi economic analyst said yesterday as reports emerged that the world's 20 biggest economies are likely to agree to increase the resources of the IMF by between $400 and $500 billion. G20 finance ministers are set to meet in Washington soon to discuss the IMF's call for more resources from January after the euro zone increased the size of its own crisis-fighting funds in March in response to G20 pressure. Sami A. Al-Nwaisir, chairman of the board of ALSAMI Holding Group, said G20 members such as Saudi Arabia, Turkey, India, South Africa, etc. "should ask for more voting power and more concessions to better and favorable deal in trade and legal issues." Al-Nwaisir added: "Once this is clear I think we would look at the world as small village but that notion should start from the people who originated the IMF first then other members of the G20 will follow." [8] The European firewall, set to amount to about $1.1 trillion, was approved late last month in a meeting with the 17 countries that use the euro currency. Ms. Lagarde said the IMF has a plan to "keep the crisis at bay" and plans to hold "Spring Meetings" with partnering countries in the coming months to swell its resources to help all its members. "The fund needs to be able to stand behind all its members and meet the needs of all those affected by the crisis - those at the epicenter, and those who are bystanders," she said. Her speech came on the same day that the World Trade Organization ]] World Trade Organization reported that global exports are expected to grow by only 3.7 percent in 2012 in large part because of the Japan earthquake and Arab Spring. [9] The FHFA has opposed reducing mortgage principal-- the actual amount owed on a loan -- on the grounds that the benefits were not clear and that the initiative could cost taxpayers money. At the Brookings Institution earlier this week, FHFA acting director Edward DeMarcoremained skeptical that principal reductions would provide greater benefits than other programs that Fannie Mae and Freddie Mac are pursuing to avoid mortgage foreclosures. "This is not about some huge difference-making program that will rescue the housing market," DeMarco said. In her remarks, Lagarde offered several reasons for economic optimism. "The U.S. is probably beginning to turn the corner, and actions taken by the Europeans have led to a little bit less stress," said Lagarde, who has been using a cane since her surgery to repair knee damage that became apparent after a recent swimming workout. She highlighted other bright spots, including a sharp drop in China's current account surplus, which is an indicator of its trade and financial relations with the rest of the world. That surplus has been running at about 10 percent of China's annual economic output. The figure is expected to drop to 3 percent this year, potentially good news for the United States and other exporting countries. Lagarde said this is a sign that China is beginning to move away from its traditional emphasis on exports. She also said she was "reassessing" her recent call for IMF member nations to pony up perhaps $600 billion to bolster the fund's crisis-fighting ability. Less may be needed -- though she did not specify an amount. [10]
"Clearly, the risk that looms largest is that sovereign and financial stresses return with renewed force in Europe," said Lagarde. She praised the decision by European Union leaders to build a larger financial firewall, but said the European Central Bank and individual EU nations still need to do more to boost economic growth, stabilize banks and move towards fiscal integration. Last month, eurozone finance officials announced plans to boost their crisis resources to €700 billion by combining two bailout funds. The IMF had called for a €1 trillion financial firewall earlier this year, but Lagarde suggested that the estimate may have been too high. "The needs now may not be quite as large as we had estimated earlier this year," said Lagarde. However she stressed that "the risks and the needs are still sizeable, and it would be imprudent to think otherwise." [11] Lagarde urges leaders not to waver. "The needs today may not be quite as large as we had estimated earlier this year, if only because action was taken by those European institutions that I mentioned earlier. Let us make no mistake, the risks and the needs are still sizeable, and it would be very imprudent to ignore that fact," she said. Even as governments throughout the world confront their own debt woes, Lagarde said the International Monetary Fund needs more resources from its 187 member nations to combat future economic crises. She said the cost of inaction could be far higher than giving the IMF more money. [12] AFP - The International Monetary Fund said Wednesday it probably needs less new money for crisis intervention than previously thought, crediting action by the eurozone for the change. "The needs now may not be quite as large as we had estimated earlier this year. It's only because action was taken by the European institutions," IMF chief Christine Lagarde said in a Washington speech. [13]
The IMF chief also urged to take advantage from the current "fragile recovery" and to go ahead with measures to secure global growth financial stability. Though the Europeans are able to solve their problems by themselves for the moment, there are many countries around the world like those in the Middle East and Africa that face difficulties and need the IMF's help, Lagarde pointed out. This doesn't mean the fund will curb its money hunting and Lagarde called on the nations to contribute to the international rescue fund. [6] Lagarde called for "more resources" from the U.S. to ensure that the global economic recovery remains stable. Lagarde cautioned that developed countries like the United States needed to rein into growing national debts, but she also said that the European Union had no intentions of letting go of countries like Greece and Spain whose spiraling debt is threatening full recovery in the "euro zone." Republicans in the U.S. House of Representatives oppose any increase of funds to the IMF. Instead, they have called for a roll back of emergency funds that the U.S. gave to the IMF in 2009. [21]
The IMF (International Monetary Fund) tells us more. High levels of household debt can present 'at least as grave a danger' to the economy as sovereign debt, as The Financial Times puts it, telling us that: 'Despite the insistence of Brussels and leading European powers on the danger of public debt, it is more often private debt that has brought economies to the brink.' The IMF ]] IMF has found that recessions tend to be much deeper and longer when they come after a period of house prices rising as households 'gorge themselves with debt'. Looking back over thirty years of history, it found that household consumption dropped by an average of 4% over the five years following the bust in cases like these. [22] The IMF is focusing right now on helping the new governments that have emerged in the aftermath of the Arab Spring, which remains underway in the Middle East and North Africa, where international financial assistance were most needed, according to Ms Lagarde. Ms Lagarde also reported that the financial upgrades she has been working on, much lesser this time, has so far attracted positive responses from Japan, Mexico, Poland, Norway and Sweden. She admitted too that convincing the United States to further increase its contributions to Fund may not be achieved at all but reminded the worlds largest economy that "the risk that looms largest is that sovereign and financial stresses return with renewed force in Europe." [23] The need to raise more money to offset the impacts of the then looming financial downturn can be set aside for now, the IMF chief admitted. "So we need to cautiously reassess, and are reassessing, to a lower number in terms of risk, which will bring me to probably reassess a lower number for the amount of additional funds the IMF needs," she added. Ms Lagarde, however, reiterated her original stance that governments must be ready to step in and provide bailout when needed like in the case of Europe, which in March approved the setting up of rescue funds that would be utilised for important financial interventions. [23] This could make the global financial system more unstable by threatening runs on sovereign debt and increasing the prevalence of herding behaviour by investors. As some formerly highly rated governments have had their credit ratings downgraded the supply of "safe" assets is falling and could be reduced by $9 billion globally in the coming years, or 16 per cent of the total, according to IMF staff estimates. [27]The onset of the financial crisis in 2008 and the sovereign debt crisis has "reinforced the notion that no asset can be viewed as truly safe", the study states. Some formerly highly rated governments have had their credit ratings downgraded and the supply of "safe" assets is falling meanwhile and could be cut by $9 trillion (6.87 trillion) globally in coming years, or 16 per cent of the total, according to IMF staff estimates. [28]
The IMF said the drop in the number of countries whose sovereign debt qualified as "safe" would reduce the supply of safe assets by $9 trillion (£5.5 trillion) from 2016 - equivalent to 16pc of the total. "Safe asset demand is expanding at the same time the universe of what is considered safe is shrinking," the IMF said in a chapter of its Global Financial Stability Review released ahead of the full publication next week. [26]
In general, however, Lagarde's remarks were upbeat. Offering a broad review of the world economy, she said that conditions have been improving and that she was ready to scale back appeals made during the winter for hundreds of billions of dollars in new money to help the IMF address global financial challenges. Lagarde, who earlier this year warned of a possible "1930s moment" of renewed economic turmoil, now says there is "breathing space" thanks to a rebound in the U.S. economy and progress in alleviating Europe's financial problems. [10] International Monetary Fund Managing Director Christine Lagarde said she will scale down her request for $US600 billion of additional resources as threats to the global economy diminish. [1]
Lagarde said the first priority is to keep the financial crisis at bay. She also urged officials to focus on ways to move the global economy beyond the crisis and foster sustainable growth. She said greater cooperation is needed to manage the "tectonic shifts" taking place in the global economy as emerging economies such as China make up a larger share of global growth. She said officials should not dawdle. [11]Lagarde said one of the biggest risks for the global economy is the threat of another debt crisis, perhaps in Spain or Italy. [12] Ms Lagarde said economic data indicate the global economy is looking up, largely bolstered by the gains of emerging and developing economies but Europe's debt still threatens a fragile recovery, according to Lagarde. [18] Ahead of the IMF's spring meetings next week, agency analysts have been warning that household debt -- in particular, mortgages that are in default or that exceed the value of the borrower's home -- is dragging down growth in developed countries at a time when the global economy is struggling to revive. [10] Clearly, the rebalancing of the global economy - a shift in demand from external deficit to surplus countries - is key and something that the IMF has been advocating for some time. It is even more important now. [29]
Lagarde, who was elected on June 28, 2011 as the first woman to head the IMF, discussed the global economy and what is in store for the 2012 IMF/World Bank Spring Meetings, scheduled for April 20 - 22 in Washington, DC. [21] IMF director Christine Lagarde calls on world leaders to work together as the global economy remains fragile. [11]
IMF calls for 'rebalancing' of global economy - Washington Times [[ Register for E-mail alerts. [9] The reason: as the global economy rebounds, exports will pick up faster than imports. The U.S., the IMF and others say China still keeps too tight a tether on its currency, and has done too little boost domestic demand. [30]
"The next steps needed to keep the crisis at bay, the building blocks needed to achieve more lasting growth and stability to put the crisis behind us and a strengthened IMF--can help us take advantage of the tectonic shifts taking place in the global economy." She added: "Clearly, the risk that looms largest is that sovereign and financial stresses return with renewed force in Europe. [16] There are still risks, hills to be climbed. We also need a broader approach--and a stronger global firewall--if we are to push back this crisis. In today's global economy, with its dazzling array of instant interconnections, a stronger European firewall can only ever be part of the solution. [31] The much expected decision of Euro Area Ministers to strengthen the European financial firewall has also been crucial. These actions will help, slowly but surely, to restore confidence and reduce vulnerabilities. We also need a broader approach - and a stronger global firewall - if we are to push back this crisis. In today's global economy, with its dazzling array of instant interconnections, a stronger European firewall can only ever be part of the solution. [29] In the Middle East and elsewhere, the global economy must help deliver the right type of growth and the jobs that people need. That is not happening on the scale needed right now. Even as we grapple with the crisis, we must take this opportunity to rethink the paradigm and harness a new type of growth. Some of the best economic minds in the world are struggling with this issue, including here at Brookings. [29] 
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