Words ought to be a little wild, for they are the assault of thoughts on the unthinking
- J.M. Keynes

Saturday, 21 April 2012

Looking at the IMF resource "boost"

First the politics:
1. Canada wants non Eurozone countries to have a veto over further aid to the Eurozone according to the FT.
2. BRICS (and other EM) nations have delayed giving specific commitments until June and their contributions are contingent on reform of IMF governance, i.e. they want more voting power.)
3. Japan wants more clout on the IMF in exchange for its contribution.

Second, how the $430bn stacks up:

USA, Canada:                                                    $0bn (Yes, Zero. Not a typing error)
Japan:                                                               $60bn
UK, South Korea, Saudi Arabia ($15bn each):  $45bn
EM (including BRICS):                                      $72bn
Europe:                                                           $200bn (Bit circular isn't it?)
Remainder:                                                        $53bn

The inescapable conclusion is that the "boost" is going to be of little use in resolving the Eurozone crisis. 

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