Asia and Europe Call for IMF to Take Larger Role in Fighting Crisis
Saturday, October 25, 2008
BEIJING, Oct. 24 -- Asian and European leaders agreed Friday that the rules guiding the global economy should be rewritten and that the International Monetary Fund should be given a lead role in aiding countries hit hardest by the financial crisis.
Speaking in Beijing on a day when stock markets plunged across Asia, leaders from nations including China, France, Germany and Japan said they were moving toward consensus ahead of next month's meeting of the 20 largest economic powers in Washington.
"Europe would like Asia to support our efforts and would like to make sure that on the 15th of November we can face the world together and say that the causes of this unprecedented crisis will never be able to happen again," French President Nicolas Sarkozy said in remarks at the opening ceremony of the Asia-Europe Meeting.
A draft of a meeting statement on the crisis called on the IMF and similar institutions to act immediately to help stabilize struggling banks and stop the flood of red ink on regional stock exchanges. "Leaders agreed that the IMF should play a critical role in assisting countries seriously affected by the crisis, upon their request," the draft said.
If adopted, the statement would be among the strongest calls yet for a leading role in the crisis for the Washington-based fund, long known as the international lender of last resort.
Countries as disparate as Hungary, Ukraine, Iceland and Pakistan have already turned to the IMF for help bridging their liquidity crunches. It was announced Friday that Iceland will receive a two-year, $2 billion loan.
The draft statement also says leaders agreed to "undertake effective and comprehensive reform of the international monetary and financial systems."
The biennial gathering, known as ASEM, has no mandate to issue decisions, and participants differ widely on their views toward international cooperation and intervention by global bodies. Free-trading Singapore and economic powerhouse Germany are attending, along with isolated, impoverished Burma and communist Laos.
South Korea, China, Japan and the 10-country Association of Southeast Asian Nations recommitted themselves at the gathering to an $80 billion emergency fund to help countries facing liquidity problems, to be established by next June.
In remarks at the opening ceremony, Chinese President Hu Jintao said that "the global financial crisis has noticeably increased the uncertainties and factors for instability in China's economic development."
China has made "active efforts to the best of its ability" to mitigate the crisis and will expand domestic demand and maintain healthy financial markets while working with the international community to revive stability, Hu said.