U.S. plays second fiddle as Europe smolders

The International Monetary Fund has assembled an extra $430 billion after weeks of discussion, complementing roughly $1 trillion that the euro zone has raised to battle its problems. The pledges mean the United States is now the fund's second-largest contributor, behind Japan, after choosing not to push a larger U.S. commitment through Congress. Despite the expansion of the world's financial crisis funds, a basic assumption is already in question. In arguing for larger pots of money, officials have argued that a bigger ''firewall'' would reassure markets and make use of the funds unnecessary. Yet Spain's borrowing costs are again rising, and it remains uncertain how a deepening of problems in Italy and Spain would be managed. — Howard Schneider (Read related article.)

Sources: International Monetary Fund; European Union | Howard Schneider and Tobey/The Washington Post April 20, 2012
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