Paymasters wary as IMF starts new funds quest

Thu Jan 19, 2012 11:56am EST
 
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By Brian Love

PARIS (Reuters) - Two years after it requested $500 billion to fight off a global slump, the International Monetary Fund's call for a further $600 billion to limit the fallout from Europe's debt crisis prompted supportive words from Brussels on Thursday but no stampede in the rest of the world to commit the cash.

The Washington-based IMF secured a predictably warm response from the European Commission, the European Union's executive body in Brussels, which urged the G20 economic powers to deliver.

"We would warmly welcome contributions from G20 countries," said Commission spokesman Amadeu Altafaj.

"This would send a very clear signal to the market to enhance the capacity of the IMF to fulfill its systemic responsibilities to all its members."

The small Gulf state of Oman, whose central bank boss Hamood Sangour al-Zadjali spoke to Reuters, pledged to chip in and to even double its commitment, which by his own admission is nonetheless "very small" next to that of big G20 countries.

Despite Oman's response and the words of encouragement from Brussels, the initial reactions of major paymasters outside of Europe were muted.

Japan and South Korea said they wanted to see decisive steps from Europe to stem a crisis that spilled out of Greece almost two years ago, rattling investor confidence and banks far more widely.

China said the IMF should be able to count on the support of G20 nations but stopped short of signaling any hard commitment of its own to provide more money.   Continued...