“Today’s discussion on the adequacy of Fund resources was a welcome opportunity to assess whether they are sufficient for the IMF to fulfill its mandate and to play a full and constructive role in securing global stability. Following the request of our membership last year through the International Monetary and Financial Committee and the general support by the G20 leaders at the Cannes summit, today’s discussion was an important step,” said IMF MD Christine Lagarde after consultations with the Funds Board. “The biggest challenge is to respond to the crisis in an adequate manner and many Executive Directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the Euro Area and protect economies around the world from spillovers and excessive output/income contractions. In this context, they welcomed the recently announced commitment of European members to contribute to the Fund’s resources, while stressing the importance of European firewalls and other policies being sufficiently strong to respond to the crisis in the Euro Area. “I welcome the recognition of the importance of ensuring adequate Fund firepower to help defuse the current global economic weaknesses and regional challenges. To this end, Fund management and staff will explore options for increasing the Fund’s firepower, subject to adequate safeguards. I welcome Executive Directors’ collective interest in resolving the crisis and securing global economic stability.” The IMF though has a significant obstacle to overcome. While most of the IMF’s members are concerned about “contagion” from the Eurozone crisis, they have sought to keep their money in their own reserves rather. It is part underlying fear that causes some to keep their maximum financial flexibility and currency reserves. Part is politics with several considerations linked to the financial discussions, including regarding future leadership and geographic allocation. Read: - “What Price Will China Demand for Eurozone Help?” - diplomaticallyincorrect.org/films/blog_post/what-price-china-will-demand-for-eurozone-help-by-ambassador-mo/38416 For the US, the request by the IMF and indirectly to support the Euro has also election year politics. Anyone that writes a big check for an international institution and/or Europe will be projected as giving away US funds at time of high unemployment and pressure for austerity. What may be wise and mutually beneficial in context of global financial stability, will not necessarily be projected as such in context of an increasingly hostile electorate, in US and in many other countries. The IMF’s record in Asia in last decade and half could prove most difficult to overcome, as Asian countries (read China) will seek an ever greater leadership role. (READ - diplomaticallyincorrect.org/films/blog_post/a-french-woman-or-an-asian-man-us-big-loser-by-ambassador/2814). Nonetheless, the IMF is too valued a mechanism and standing commitment. The IMF may not get all but it will get most of what it wants. See Film Report: -“Eurozone Money/Politics - Back to Script” - diplomaticallyincorrect.org/films/movie/eurozonemoney-politics-back-to-script/23910 By Ambassador Muhamed Sacirbey Facebook – Become a Fan at “Diplomatically Incorrect” 

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