Ahead of G20 summit Brazil conditions IMF support and wants stimulus policies
The amount of additional money Brazil plans to contribute to the IMF will depend on commitments to bolster the influence of emerging-market nations at the global lender, a senior Brazilian government official said on Tuesday.
The conditionality highlights the rift between emerging and developed nations ahead of a meeting between leaders of the Group of 20 major economies next week that aims to tackle the ongoing debt crisis in Europe.
The official said Brazil had planned to contribute around 10 billion dollars to the IMF anti-crisis war chest. However, Brazil could give less if it sees there is no commitment to implement an agreement to lessen Europe's sway at the IMF.
”We are frustrated because we see that countries that know they will lose influence are resisting the (quota) formula, said the official. The amount of additional resources remains open. It could be more than 10 billion or less.
He said some European countries are resisting changes to a formula that assigns different weights to the voting power of IMF members.
In another expression of dissent also with the EU, the Brazilian official said that there is increasing support among G20 countries for economic stimulus measures.
The world economic situation has worsened since the last G-20 meeting in April, and the insistence on government budget austerity hasn't helped the situation. Brazil has long supported stimulus spending by countries that have the resources for it, and more governments are thinking that way.
This discussion in Europe and the G-20 has gained importance; we think talks (at the G-20 meeting in Los Cabos, Mexico next week) are going to be moving more towards the importance of spurring growth, according to the official.
There are no concrete plans to announce stimulus measures at the meeting, and the instability of the world economic situation, especially in Europe, makes it hard to say what the outcome of the meeting will be. The Greek election on June 17, the day before the start of the meeting, adds even more uncertainty, the official said.
The leaders of the BRICS group of leading emerging economies, which includes Brazil, Russia, China, India and South Africa, will meet on June 18 to discuss additional resources for the IMF and the stimulus initiative, the official said.
He said he did not know whether other BRICS countries planned to announce the exact amount of resources to be pledged after that meeting.
We agreed to discuss that issue between ourselves before any announcements,” he said.
In April, leading world economies pledged to raise 430 billion dollars for the IMF to protect the global economy from the Euro-zone debt crisis.