A better G-20 agenda (Part 3)
By Philip Zelikow The next step toward a better agenda for the G-20 summit: The proposal to expand U.S. contributions to the IMF is good and important. Not to be confused with Secretary Geithner’s call for global stimulus spending (about which more below). Geithner’s call for expanding IMF "New Arrangements to Borrow" is timely and ...
By Philip Zelikow
By Philip Zelikow
The next step toward a better agenda for the G-20 summit:
The proposal to expand U.S. contributions to the IMF is good and important.
Not to be confused with Secretary Geithner’s call for global stimulus spending (about which more below). Geithner’s call for expanding IMF "New Arrangements to Borrow" is timely and important. The proposal is to add $500 billion of emergency credit facilities for countries trying to stay afloat, like Ukraine. The money is not for stimulus; it is for fiscal survival and sustaining international trade. Indirectly, the plan might also help mitigate the growing exposure of the European banking system which, incidentally, is one of the reasons that leading European countries are against the stimulus part of Geithner’s proposals.
This move should get bipartisan support, showing the United States will do its part in fashioning an international approach to an international crisis. Japan has also stepped up with some large financial commitments to expand the IMF. Its new finance minister, Kaoru Yosano, looks like he is prepared to be a lively, constructive player.
Europeans are already uneasy about the corollary part of Geithner’s proposal, the need to update, ahead of the usual schedule, the voting powers in the IMF based on current contributions. Such a review is bound to increase Asia’s voice at the expense of Europe. This review is the right move, though, and would not happen — in the U.S. proposal — until 2011.
Philip Zelikow holds professorships in history and governance at the University of Virginia’s Miller Center of Public Affairs. He also worked on international policy as a U.S. government official in five administrations.
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