EU FINANCE ministers are expected to support a doubling of the International Monetary Fund (IMF) resources to $500 billion at a meeting in Brussels today.
They will also call for continued co-ordination of economic stimulus measures to tackle the financial crisis and reform of the global regulatory system, according to a draft paper outlining the EU’s position for the upcoming G20 meeting in London.
“It is essential that the IMF has appropriate financial means to assist countries particularly affected by the current crisis. EU member states support a doubling of IMF resources and are ready to contribute to a temporary increase if needed,” says the paper.
The IMF has called for its funds to be doubled to $500 billion to help it deal with a growing number of calls from states affected by the worst economic crisis since the second World War.
The EU paper, which could still be amended by ministers today, suggests that countries with large foreign currency reserves – a reference to Japan and China – should be encouraged to participate in the proposed refinancing of the IMF.
In the EU, Latvia and Hungary have both applied for IMF loans to help them stave off economic collapse while Romania is in talks with the fund. EU ministers are concerned that if the financial crisis continues, the IMF will not have enough resources to meet requests from countries.
“We must all give more money to the IMF,” said French finance minister Christine Lagarde as she arrived at a meeting of euro-zone ministers last night ahead of today’s meeting of all 27 ministers.
Last night, ministers discussed the state of the euro-zone economy, which is suffering a sharp contraction as businesses shed jobs and consumer confidence falls. Spanish finance minister Pedro Solbes said new estimates suggesting an unemployment rate of 17.2 per cent in Spain were “bad news”. EU labour ministers, who were also meeting in Brussels, discussed loosening the rules on a €500 million European fund designed to provide states with money to help retrain workers. The fund is currently open to applications when 1,000 workers are made redundant at a firm, but the European Commission wants to reduce this to 500 workers and cut the amount of state co-funding required to 25 per cent, down from 50 per cent.
Minister of State for Labour affairs Billy Kelleher said he pointed out the “perilous state” of the Irish economy in support of the commission proposal. If the scheme was amended, job losses at Dell, SR Technics and Waterford Crystal could get aid, he said.
