27.02.2012
By Simon Miller
Non-eurozone finance ministers have told the area to build up its firewall before it can get more cash via the International Monetary Fund (IMF).
A statement following the G20 meeting of finance ministers and central bank governors, said that euro area countries would "reassess the strength of their support facilities in March. This will provide an essential input in our ongoing consideration to mobilise resources to the IMF".
It added: "We are reviewing options to ensure resources for the IMF could be mobilised in a timely manner."
The international community has already shown its annoyance with the eurozone with the US already saying that it would not commit more money to the IMF without futher imput from the likes of Germany.
US Treasury Secretary Tim Geithner, told the summit: "I hope we're going to see, and expect we'll see, continued efforts by Europeans to put in place a stronger and more credible firewall. The IMF can't move forward without more clarity on Europe's own plans."
UK Chancellor George Osborne told reporters that the rest of the world will only consider extra resources for the IMF once the eurozone themselves contribute more to supporting their own currency.
"We have to see the colour of the eurozone's money first – and, quite frankly, that hasn't happened. Until it does, there's no question of extra IMF money from Britain or probably anyone else," he added.
Christine Lagarde released a statement following the meeting warning that the global economy was not out of the danger zone.
Lagarde said that although derailment of the global economy was a "clear and distinct danger" a few months ago, it had been avoided due to strong policy measures.
However, she added: " “But the world economy is still not out of the danger zone, and the G-20 countries must now strengthen resilience to further shocks that could result from still fragile financial systems, high public and private debt, and higher world oil prices."
At the G20 summit, disussions were held to build stronger global firewalls, including enhancing the IMF's resources to guard against renewed shocks and to restore global confidence.
Lagarde continued: ""We have suggested an increase in IMF lending capacity of $500bn (£315bn), which would be combined with an equally credible, high quality and properly sized firewall at the European level. I was encouraged by the G-20’s reaffirmation of the importance of this process."
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