I.M.F. Adds $430 Billion in Emergency Lending Ability
The article discusses how the International Monetary Fund
(IMF) has raised $430 billion in extra lending ability to be used if the euro
zone crisis worsens or if global financial conditions deteriorate. Many world
leaders discussed how this increase in lending ability from the IMF could bolster
growth, reduce unemployment and poverty, and ensure financial stability around
the world. This lending money came from Japan ($60 billion), Britain ($15 billion),
Saudi Arabia ($15 billion), South Korea ($15 billion), and other small amounts
from Sweden, Norway, Poland, Australia, Denmark, and Singapore equaling $200
billion. Other countries have indicated they will contribute, but haven’t declared
how much. One issue is that emerging countries don’t have enough voting power
within the fund. Critics say that the voting within the fund should be
proportional to the countries’ economic output and that voting wouldn’t change
depending on the amount pledged. Essentially, the increase in extra lending is
a cushion and doesn’t change the quota contributions. Lastly, some countries
don’t want to contribute to the fund because they think Europe’s problems are
its own to fix.
4 comments:
This makes me think if this is the solution to the economic problem we are facing in Europe. Every countries has limited resource, we can't continue lending forever. I think we should look at long-term change rather than temporary solution.
I agree with the above statement. Although I do think this will foster stronger relationships between countries, this sounds like more of a quick fix rather than focusing on long term economic stability in the struggling economies around the world. Yes helping to get out of debt is good, but what are the long term policies that need to be set in place to deal with the economic issues at hand?
It is one thing to lend money ... it is an entirely different monster to throw money at a hopeless situation
Although I think it is important that we have extra funds to help Europe, I think that it is interesting that these funds were raised primarily for Europe when there have been many countries that have been struggling for decades. On the bright side of things, perhaps IMF were thinking that they should raise the extra funds so that if Europe needs funds it does not take away from the pot that usually is used for smaller countries. It just seems like IMF continues to favor the bigger countries. They were set up to help maintain global stability, but how can we be stable if we have countries that have extreme poverty?
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