Developing nations seek more voting rights at IMF for giving cash
The BRICS nations of Brazil, Russia, India, China and South Africa have demanded greater say at the IMF before pumping in more cash into the fund's war chest.
Brazilian Finance Minister Guido Mantega laid out the terms for a deal after a meeting with other BRICS nations.
"We are not ready to set a figure, because there are preconditions that have not been fulfilled by the countries whether they will comply with the agenda of reforms," he said.
IMF managing director Christine Lagarde wants $400 billion in extra funds to protect countries from any worsening of the euro zone debt crisis.
While Europe has pledged $200 billion, Japan $60 billion, and another $60 billion offered by Nordic countries, Switzerland, Poland and others, the IMF is relying on the BRICS nations to contribute the remaining $80 billion as it seeks to double its war chest.
The US, the IMF's largest shareholder, has refused to contribute to the crisis fund. This has left the BRICS as the best source for cash.
According to Reuters, a source from a major emerging economy said the BRICS were for contributing but faced two hurdles. They want more voting power in IMF to reflect its growing sway on the world financial stage, and some countries need to have any agreement approved by their capitals.
Meanwhile, Lagarde called the euro zone the "epicenter of potential risk" for a world economic recovery that is "timid and fragile" and said she was working on a deal.
The IMF firewall fund would complement the $1 trillion in emergency funds for Europe agreed upon by the EU leaders last month.
Source: Germany News.Net
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