(Image Source: Leadership)

BY RUISHA QIAN
 

ANCHOR ERICA COGHILL

At Saturday’s G20 meeting in Paris, world leaders are set to wrestle about whether to boost IMF’s aid in the European debt crisis. The Economic Times explains one side of the debate.

“Brazil, Russia, India and China are working on ways to contribute money rapidly to expand the effective funds of the International Monetary Fund... to increase the role of emerging economic nations in combating the eurozone sovereign debt crisis.”

The plan would give the IMF roughly $750 billion in normal lending capacity.

Bloomberg, quoting a Hong Kong-based strategist, says more involvement in funding could give emerging countries more say in the euro crisis.

“Emerging markets, in particular China, may feel the pressure at this point to make some gestures to help the West. They do not want to invest too much given that the West’s problems are of its own making, and if they help, they want to do so in a way that brings them benefits and recognition.”

The plan has been shot down by the US, UK, and Canada.

In an interview with CNBC, US Treasury Secretary Tim Geithner says Europe should be able to take care of itself.

“Of course Europe, as a whole, has very substantial resources available to help manage the problem. The financial problem that faces Europe is complicated to solve, but they are well within the resources that Europe has available.”

And the Financial Times explains why the U.K. isn’t fond of the idea of more IMF aid, either.

“The emerging economies’ offer put the UK in a particularly difficult position because David Cameron, prime minister, called this week for a much bigger “bazooka” to prevent contagion spreading from Greece, through Spain and Italy to the rest of the world economy, but does not want to commit UK funds to the effort.”

Despite the wrangling between developed and developing countries, the Wall Street Journal says ultimately, the plan is likely to encounter legal difficulties.

“Even if the G-20 backs the idea, however, doubling the IMF's resources requires legislative approval, a political hurdle that could stymie efforts in some countries. Some lawmakers in the U.S. Congress, for example, have discussed de-funding existing commitments to the IMF. Asking Congress for additional funding would be a major obstacle.”