IMF warns Europe not to ease up debt battle

Brazilian Finance Minister Guido Mantega said in his speech to the IMF committee Saturday that the resistance of some countries to the change in voting power had been “deeply damaging to this institution.”

He said that even though Brazil would rank as the third largest economy in Europe behind Germany and France, its voting power at the IMF was equivalent to the Netherlands and smaller than Spain, Italy and Britain.

Elizabeth Stuart, a spokeswoman for Oxfam, the international aid agency, said that it was critical for the IMF to resolve the disputes over voting power so that the 2010 agreement can be implemented by the IMF’s fall meeting.

“It is outrageous that a country like Luxemburg has more voting weight at the IMF than South Africa or Argentina,” she said.

Of the more than $430 billion in increased support that the IMF raised, the agency released a list of specific commitments from 12 individual nations ranging from $60 billion from Japan to $2 billion from the Czech Republic. The biggest total amount was $200 billion pledged back in December by Europe.

Italian Premier Mario Monti said Saturday in Milan that the IMF’s move to boost its resources to provide a financial backstop for Europe was a clear sign that Italy and the rest of Europe “had put its house in order.”

On the question of whether the expanded IMF resources would be enough, Monti said, “I ask myself if this will be enough. I say that this is something objectively important, but market reactions are not always predictable, and it is not wise for those who govern to make predictions.”

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Online:

International Monetary Fund: http://www.imf.org

World Bank: http://www.worldbank.org

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Associated Press writers Colleen Barry in Milan and Desmond Butler in Washington contributed to this report.

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