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US may go along with IMF boost if Brussels commits first

Treasury secretary tells Davos meeting that US may contribute to global economic body's war-chest

AFP, Friday 27 Jan 2012
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US Treasury Secretary Timothy Geithner signalled Friday the United States is ready to go along with an increase the IMF's ability to loan to Europe if Brussels boosts its own rescue kitty first.

"The only way Europe is going to be successful ... is for them to build a stronger firewall," Geithner told the meeting of the world's business and political elite at the Swiss ski resort of Davos.
 
"That's gonna to require a bigger commitment to resources, the Europeans recognise that and it's an unfinished piece of the framework for the moment that and they have to fix that.
 
"If Europe is able and willing to do that, then we believe the IMF can play a supportive and constructive role," he said.
 
The Treasury chief stressed that the IMF could not make up the total sum of additional funds required to ringfence the European crisis.
 
But if Europe was able to itself boost its rescue funds, "then we are going to see the IMF and the major shareholders of the IMF and the emerging economies very supportive in trying to reinforce those efforts," he said.
 
Geithner did not directly refer to a larger US commitment. The United States is the largest contributor to the IMF.
 
Earlier this month, Washington insisted that it would not help boost the IMF's warchest, after the lender's director Christine Lagarde said she would need an additional $500 billion to protect against Europe's financial crisis.
 
But European leaders meeting in Davos said they hoped that the United States, Britain and major emerging economies would eventually contribute.
 
Egypt is currently in negotiations with the IMF over a $3.2 billion loan to help the country plug its budget gap. 
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