DAVOS, Switzerland - In response to widespread anxiety over funding sources for debt relief in Europe, the head of the International Monetary Fund gave assurances that "many countries" have committed to contributing financial resources.
Christine Lagarde, managing director of the IMF, said it is not a good time to go into details about which countries have already made a commitment. She said finalizing these deals requires long negotiations.
"I can tell you that we are in the process of negotiation, and many countries have already committed to making such a contribution," Lagarde told China Daily over the weekend at the annual meeting of the World Economic Forum.
Lagarde said she plans to make a case for why emerging countries should lend aid to the ailing European economy on the basis of four reasons.
First, because all countries are interconnected and dependent economically, no country can be immune from the crisis. Second, the commitment of resources shows confidence in the world economy, she said.
Lagarde said the contribution is used to build up a financial firewall and investor confidence. It will likely not be used, she said.
Lastly, even if the funds are used, they will be paid off with stable returns as our previous investment experiences have already shown, said Lagarde, who recently visited emerging economies, such as South Africa and China, to mobilize resources.
Lagarde did not say whether she would accelerate the pace of reforms to IMF voting rights and governance to attract more resources, which emerging countries such as China, India and Mexico are clamoring for.
In an earlier interview, Li Daokui, a policy advisor with China's central bank and a professor of economics with Tsinghua University, said the Chinese government will contribute to the IMF only if it sees a viable rescue plan from the European Union.
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