US says no plans to give IMF more money

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WASHINGTON: The US Treasury reiterated Thursday that Washington has no plans to provide more money to the International Monetary Fund as the eurozone crisis drives the Fund to raise more emergency resources.

Treasury undersecretary for international affairs Lael Brainard told a congressional hearing that the US economy could be damaged by a further deterioration of conditions in Europe.

But with the IMF seeking to boost the funds it has for intervention and support against eurozone crisis contagion by some $500 billion, Brainard said the US was not planning on chipping in.

"We believe that the IMF has adequate resources, and we don’t see any need for the US to provide additional resources to the IMF at this time," she told the Senate Banking Committee.

"The euro area is currently confronting difficult challenges of fiscal sustainability, or liquidity, and of structural imbalances," she said.

"We believe Europe has the will and the capacity to manage these challenges effectively."

The IMF said in January it was seeking to increase its lending capacity by up to $500 billion to confront the debt crisis in Europe.

Fund Managing Director Christine Lagarde and her top staff have been polling G20 leaders around the world to see if they will contribute to the new funding.

Only the euro area so far has committed to contributing, while Washington has stood out in refusing to take part.

"We have welcomed the IMF’s role in helping to contain the crisis and its impact on the US recovery and global economy," Brainard said.

"However, while the IMF should continue to play a constructive role in Europe, IMF resources cannot substitute for a strong and credible European firewall and response.

"The challenge Europe faces is within the capacity of the Europeans to manage and the (US) administration has been clear with our international partners that we are not seeking addition funding for the IMF," she added.

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