Major emerging powers stood ready on Friday, April 20 to pledge money to bolster the International Monetary Fund's crisis-fighting war chest, though Brazil was holding out for promises that their voting power at the global lender would increase, Reuters reported.
Russia said that G20 advanced and emerging countries were ready at a meeting on Friday to commit enough new funds to fulfill IMF chief Christine Lagarde's request for at least $400 billion to draw a line under the euro-zone crisis. Russia itself, he said, would offer $10 billion.
Support from Russia, China and Brazil is crucial to achieve the doubling of the IMF's war chest the global lender is seeking. Europe and Japan already have pledged $320 billion. An international diplomat said that in all, emerging nations have lined up at least $100 billion.
The IMF has warned that the euro zone's debt crisis presents the gravest risk to the global economic expansion, and financial markets worry that Spain and Italy may next require bailouts, following Greece, Ireland and Portugal.
Enlarging the IMF's coffers could offer solace to nervous investors that any widening of the crisis could be contained. Lagarde said on Thursday she expects to seal a deal on fresh funds at the World Bank/IMF meetings this weekend.
But Brazil said that as a condition for funds, emerging powers want fresh pledges to recognize their fast-growing global economic weight written into the G20 communique. They are frustrated over delays - particularly by the United States - in implementing an agreement to lessen Europe's sway at the IMF and lift China into the No. 3 voting slot.
China could contribute $60 billion, matching Japan's pledge, although Beijing had not finalized the number. Saudi Arabia would chip in a little less than China, while Russia and Brazil are likely to contribute between $10 billion and $20 billion each.
This would easily reach the marker of at least $400 billion set by Lagarde. The firewall would complement the $1 trillion in emergency funds for Europe agreed upon by the EU leaders last month, which was another precondition for countries bolstering the IMF resources.
