Tuesday, June 19, 2012

19/6/2012: IMF raises more funds at Los Cabos

IMF has secured some serious money at Los Cabos G20. From Christine Lagarde statement today:

"A number of IMF member countries have today announced pledges to boost IMF resources, completing the effort launched jointly at our Spring Meetings in April 2012 by the International Monetary and Financial Committee (IMFC) and G-20 (see Press Release No. 12/147). Countries large and small have rallied to our call for action, and more may join. I salute them and their commitment to multilateralism. As a result, total pledges have risen to US$456 billion, almost doubling our lending capacity."

Here's a table. Stars mark countries that contributed at G20 meeting in Los Cabos:

Keep in mind - contributions totals are new contributions on top of existent ones, so IMF is not running out of money. Spain will make things worse, but it too will not put IMF over the top... not yet. 

You can read the above as the 'good news': IMF got more fire power to deal with the crises. You can also read it as the bad news: in desperately seeking its next debt fix, Europe has de facto surrendered its last bastion of geopolitical influence - the IMF - to the new economies. The road that led us to Los Cabos marks that change from the Euro area being the controlling power over the IMF, if only in conjunction with the US, to it becoming the largest borrower from the IMF. With this change, we might as well recall that ten years ago, Brussels leaders were talking about this being a European Century.

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