A top European central bank official on Saturday said the International Monetary Fund requires more funds to handle global economic challenges, according to reports.
European Central Bank Vice President Vitor Constancio told reporters after a meeting of European Union finance ministers and central bank governors in Copenhagen that additional resources for the IMF would be for “general resources” of the IMF, not for any specific fund or account for Europe, according to reports.
Constancio’s comments come after euro-zone finance ministers on Friday agreed to temporarily boost the lending capacity of the region’s rescue funds to 700 billion euros ($934 billion) from €500 billion in an effort to convince markets they can contain the region’s long-running sovereign debt crisis.
Finance ministers from the G-20 economies meet in April in Washington, where they will discuss whether to increase funding for the IMF.
According to reports, Constancio said the IMF needs more resources so that it can respond to a future emergency situation.
It is unclear if the U.S. would back an increase in IMF funding. Many Republicans on Capitol Hill have been vocally opposed, and Treasury Secretary Tim Geithner on March 21 said at a congressional hearing that he “does not see the case” for asking the fund’s shareholders to agree to another increase in IMF resources to lessen the burden on Europe.
Under pressure from Republicans, Geithner acknowledged that such an increase would require congressional approval.
The IMF currently has roughly $400 billion of uncommitted loanable resources available to respond to crises, Geithner noted.
At the hearing, Republicans expressed concern about increasing U.S. taxpayer exposure to Europe, while Democrats worried about the impact of an expanded European crisis.