India not keen on IMF intervention in Euro zone crisis
15 Oct 2011
While some developed and emerging nations want the International Monetary Fund (IMF) to augmenting resources to help tackle the debt crisis in Europe, India is not too keen on such a step.
European nations, along with countries such as Australia and South Africa, have been seeking an augmentation of IMF resources to help fight the debt crisis in the euro zone. Even some of the emerging nations in the G20 are pitching for such a step. G20 finance ministers are currently meeting in Paris, ahead of the October 23 European Union summit where France and Germany are expected to announce a rescue plan for the crisis-hit nations of the continent.
Estimates are that that the IMF may need about $350 billion to help fight the debt crisis. But countries like India and Brazil believe that the crisis needs to be tackled by Europe itself, instead of dragging in the IMF.
''Augmentation of resources of these institutions is a way to avert the crisis,'' remarked Pranab Mukherjee, the Indian finance minister. ''But how to augment the resources and all the related issues will be discussed collectively.''
India does not want IMF's resources to be augmented at the cost of a rollback of the 'new arrangements to borrow' (NAB) facility. India also feels that the resources of the World Bank also needed to be augmented, orelse the bank's capacity to lend to the developing nations would be reduced.
''We should remember one major reason of tackling the problem of the first crisis was because of the proactive role the World Bank played by providing assistance to the developing countries,'' said Mukherjee. ''They had resources at that time, but now they have reduced substantially and they are not in a position to fulfil even their mandated responsibility.''
