IMF chief Christine Lagarde in last-ditch struggle to raise funds

Friday, April 20, 2012
By Paul Martin

Fresh fears emerge that eruption of financial crisis will leave International Monetary Fund short of emergency cash

Larry Elliott in Washington
Guardian.co.uk
Thursday 19 April 2012

Christine Lagarde is involved in a struggle to raise funds for the International Monetary Fund amid fears that a fresh eruption of the global financial crisis will leave the organisation short of emergency cash.

The fund’s managing director was lobbying hard for Britain and other developed nations that have yet to pledge money to build a bigger firewall to provide more than $400bn (£250bn) in fresh resources.

George Osborne, who arrived in Washington on Thursday night for the spring meetings of the IMF and the World Bank, has yet to say whether the UK will participate in the fundraising exercise, insisting that the eurozone must show a willingness to sort out its own problems first.

With the US refusing to participate in the fundraising exercise, the IMF has already scaled down its target from the $600bn it was looking for when the eurozone crisis was at its height in late 2011.

But the upward pressure on Italian and Spanish borrowing costs has raised the prospect that the eurozone’s third and fourth-biggest economies might need financial support, providing extra ammunition for Lagarde as she asks for loans both from developed nations and the leading emerging economies.

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