As officials from Group of 20 economic powers gathered in Mexico City for their first meeting of 2012, policymakers appeared at an impasse over whether European countries should have to promise additional action before more money is pledged
for the IMF.
The Washington-based global lender secured a predictably cordial response from the European Commission, the European Union's executive body in Brussels, which urged the G20 powers to deliver.
"We would warmly welcome contributions from G20 countries," said commission spokesman Amadeu Altafaj. "This would send a very clear signal to the market to enhance the capacity of the IMF to fulfill its systemic responsibilities to all its members."
But Asian countries joined their North American counterparts in saying they wanted to first see Europe take decisive steps to stem a crisis that spilled out of Greece almost two years ago, rattling investor confidence and banks far more widely.
Japan stands ready to support the IMF fund-raising drive, but wants to see strong efforts by European countries to resolve the crisis first, a senior government source said in Tokyo.
China said the IMF should be able to count on the support of G20 nations but stopped short of signaling any hard commitment of its own to provide more money.
The reactions in Asia followed even cooler ones on Wednesday from the Canada and above all the United States, which is every bit as cash-strapped and indebted as Europe since the slump of 2008-09.
G20 officials arriving for the two-day meeting in Mexico City on Thursday and Friday gave no hint of how the deadlock could be resolved. "I wish I knew," said one delegate from a non-European country.
Still, there were positive signs from Chile and the small Gulf state of Oman.
"This is an issue for discussion in the short in President (Sebastian Pinera's) agenda, and I don't want to make any announcement before he has been informed," Chile's finance minister, Felipe Larrain, said. "But it is something we are
studying," he said when asked if Chile would consider contributing to the IMF war chest.
Oman's central bank chief, Hamood Sangour Al-Zadjali, told Reuters that Oman pledged to chip in and to even double its commitment, which by his own admission is nonetheless "very small" next to that of big G20 countries.
The IMF is looking for $500 billion to beef up its lending capacity from around $380 billion currently, and according to IMF sources, would like another $100 billion as a "protection buffer."
Europe has already pledged to inject $200 billion but has yet to detail who pays how much, after which another $300-$400 billion would be needed to meet the IMF's call.
WILL EVAPORATING
Europe's debt crisis is widely seen as the biggest threat to the global economy.
Many countries exhausted much of their financial firepower fighting the global downturn in 2008 and in 2009, when an initial G20 pledge of $500 billion to the IMF was made. A fresh global slump would raise fears that more countries might need to
be rescued by the IMF.
US help looks like the biggest starting snag in the quest for new funds.
With a strained budget at home and an election looming, some US congressional Republicans have threatened to yank $100 billion in US money to the IMF if the funds are used to bail out euro zone countries.
The White House is unlikely to want to take the issue on as President Barack Obama seeks re-election later this year.
"We have told our international partners that we have no intention to seek additional resources for the IMF," a Treasury spokeswoman said.
A similar if less strident message has emerged from other key countries.
"Many countries want the Europeans to move ahead with tougher and clearer measures, which at this moment translates to more resources to its stability fund," a Brazilian government source attending the G20 officials' meeting in Mexico said.
In Canada, the head of the country's central bank said it was not clear European governments had done everything necessary to make sure they could fund themselves at sustainable interest rates over the next few years.
"If it makes sense to enhance the resources of the IMF, the principal focus, it would seem, should be on dealing with fallout of the European crisis for innocent bystanders," Bank of Canada Governor Mark Carney told a news briefing in Ottawa on
Wednesday.
