MEXICO CITY: G20 finance ministers and central bankers will meet this weekend in Mexico City to discuss the eurozone debt crisis and more money for the IMF following the latest rescue deal for Greece.
With the huge Greek pact having provided temporary market relief, they were expected to take a calmer look at the need for structural and fiscal reforms, conditions to boost growth and financial firewalls to avoid contagion.
"The recovery is still fragile and vulnerable to shocks, and the G20 needs to remain active and alert to downside risks," Lael Brainard, Under Secretary of the US Treasury for International Affairs, said Wednesday.
"The euro area crisis remains the foremost risk to global growth, and of course to our domestic recovery," she said.
"In Mexico City we will discuss with our G20 partners implementation of the concrete commitments that were made in the action plan by members in the name of achieving strong, sustainable, balanced growth."
The Europeans hope the meeting of treasurers of the main developing and emerging countries will lead to an increase of resources for the International Monetary Fund and contribute to a more permanent solution to the debt crisis.
The IMF announced in January it was looking for $500 billion to help it backstop any fallout from the eurozone crisis.
"We see the need for what's been called the global financial firewall to protect countries against the risk of contagion," IMF spokesman Gerry Rice told reporters in Washington Thursday.
"Part of that firewall is an increase in IMF resources, which we have said would supplement resources that the European authorities would put on the table."
"We don't have specific commitments, or numbers on that, but we are encouraged by the signaling," he added.
EU countries, which pledged 150 billion euros ($192 billion) in December,
are strongly urging global support for more money for the Fund.
The IMF fundraising "must have a worldwide dimension," said Amadeu Altafaj, spokesman for the European Commission in charge of economic issues.
But other nations have yet to announce commitments, and some finance ministers, including from Mexico and Japan, have said that the G20 is not yet ready to agree on the issue..
IMF director Christine Lagarde has herself pressured Europe to first boost its own rescue fund -- the European Financial Stability Facility (EFSF) -- for fragile countries.
That opinion is shared by the United States, for which "IMF resources cannot substitute for a strong and credible European firewall," according to Brainard.
And on Thursday a senior Canadian official said Ottawa agreed that the European Union first needs to strengthens its own crisis intervention resources.
Meanwhile, Mexico, which holds the current G20 presidency, is seeking to improve worldwide checks on banks and financial institutions at the coming meeting.
"That's an important issue for Mexico," said Miguel Messmacher, head of the economy planning unit at the finance ministry.
"We had our crisis in 1994-1995, but after that we learned and we've reinforced the supervision and regulation of our banking system significantly, in such a way that it wasn't really affected by the international financial crisis."
Other themes Mexico wishes to discuss include markets for raw materials and energy, as well as the green economy, Messmacher said.
Few decisions were expected to come out of the Mexico meeting, which precedes another meeting of finance ministers in April and the G20 summit in Los Cabos, northwest Mexico, in June.
indiatimes.com
With the huge Greek pact having provided temporary market relief, they were expected to take a calmer look at the need for structural and fiscal reforms, conditions to boost growth and financial firewalls to avoid contagion.
"The recovery is still fragile and vulnerable to shocks, and the G20 needs to remain active and alert to downside risks," Lael Brainard, Under Secretary of the US Treasury for International Affairs, said Wednesday.
"The euro area crisis remains the foremost risk to global growth, and of course to our domestic recovery," she said.
"In Mexico City we will discuss with our G20 partners implementation of the concrete commitments that were made in the action plan by members in the name of achieving strong, sustainable, balanced growth."
The Europeans hope the meeting of treasurers of the main developing and emerging countries will lead to an increase of resources for the International Monetary Fund and contribute to a more permanent solution to the debt crisis.
The IMF announced in January it was looking for $500 billion to help it backstop any fallout from the eurozone crisis.
"We see the need for what's been called the global financial firewall to protect countries against the risk of contagion," IMF spokesman Gerry Rice told reporters in Washington Thursday.
"Part of that firewall is an increase in IMF resources, which we have said would supplement resources that the European authorities would put on the table."
"We don't have specific commitments, or numbers on that, but we are encouraged by the signaling," he added.
EU countries, which pledged 150 billion euros ($192 billion) in December,
are strongly urging global support for more money for the Fund.
The IMF fundraising "must have a worldwide dimension," said Amadeu Altafaj, spokesman for the European Commission in charge of economic issues.
But other nations have yet to announce commitments, and some finance ministers, including from Mexico and Japan, have said that the G20 is not yet ready to agree on the issue..
IMF director Christine Lagarde has herself pressured Europe to first boost its own rescue fund -- the European Financial Stability Facility (EFSF) -- for fragile countries.
That opinion is shared by the United States, for which "IMF resources cannot substitute for a strong and credible European firewall," according to Brainard.
And on Thursday a senior Canadian official said Ottawa agreed that the European Union first needs to strengthens its own crisis intervention resources.
Meanwhile, Mexico, which holds the current G20 presidency, is seeking to improve worldwide checks on banks and financial institutions at the coming meeting.
"That's an important issue for Mexico," said Miguel Messmacher, head of the economy planning unit at the finance ministry.
"We had our crisis in 1994-1995, but after that we learned and we've reinforced the supervision and regulation of our banking system significantly, in such a way that it wasn't really affected by the international financial crisis."
Other themes Mexico wishes to discuss include markets for raw materials and energy, as well as the green economy, Messmacher said.
Few decisions were expected to come out of the Mexico meeting, which precedes another meeting of finance ministers in April and the G20 summit in Los Cabos, northwest Mexico, in June.
indiatimes.com
No comments:
Post a Comment