Wednesday, 12 October 2011

IMF doesn't have enough to bail out Europe, collapse possible

IMF chief Christine Lagarde said Monday the fund had adequate resources to deal with the debt crisis affecting the world economy.

"I believe that today the IMF has adequate resources," Lagarde told Europe 1 radio after some member nations of the G20 meeting in Paris on Friday and Saturday called for increased resources for the world body.

The United States said an increase was unnecessary.

Asked what she considered an adequate level of resources for the International Monetary Fund, Lagarde declined to give figures.

Rich and emerging G20 economies meeting in Paris committed to ensuring that the IMF has adequate resources to meet its responsibilities and said they looked forward to debate the issue during the G20 summit in Cannes, France, November 3 and 4.

"What is essential is that the IMF's resources are adequate to face the needs of its members" in dealing with the crisis, Lagarde said Saturday, without elaborating.

The IMF chief had said in Washington last month that the fund's lending capacity "pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders."

On Saturday she again warned that the global economic outlook has deteriorated since the G20 meeting in Washington, and the weakness of advanced economies was "beginning to hit emerging countries as well."

Speaking to Europe 1 on Monday she said: "This could continue."

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