India will pledge an additional $ 10 billion to the International Monetary Fund’s (IMF’s) firewall against a eurozone financial conflagration. This was announced by Prime Minister Manmohan Singh in his opening speech at the Group of 20 summit in Mexico.
(L-R) Brazilian President Dilma Roussef, Russian President Vladimir Putin,Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao and South African President Jacob Zuma pose for group photo in Los Cabos, Mexico. AFP Photo/Ria-Novosti Pool/Alexei nikolsky
The money will be part of an estimated $63-billion contribution by the BRICS countries, the emerging group og economies currently chaired by India, to the IMF’s $430-billion emergency fund.
The BRICS countries, comprising Brazil Russia India China and South Africa, had earlier agreed that their contributions would be conditional on the IMF enhancing their voting rights and “that this recourse will be called upon only after existing resources are substantially utilised.” If India’s IMF vote share is actually increased, it will have to pay another $ 11 billion, said government officials.
Though the Greek general elections on Sunday gave the euro zone some breathing space, high interest rates still commanded by Spanish and Italian government bonds indicate markets remained unconvinced that the crisis is on the path of resolution.
Prime Minister Manmohan Singh warned that Europe’s “uncertainty” was the greatest threat to the global economy.