6 major emerging economies pledge more for euro crisis

Six leading emerging economies on Monday pledged to boost the lending capacity of the International Monetary Fund to deal with the European financial crisis at the G-20 summit in Los Cabos, Mexico.

They decided to raise the fund`s resources to 456 billion U.S. dollars, up from 430 billion dollars agreed at the G-20 meeting of central bank heads and finance ministers in April.

The leaders of China, Brazil, Mexico, India, Russia and South Africa, after a meeting on the sidelines of the summit, announced a joint statement on their increased contributions to the IMF. China promised 43 billion dollars, Brazil, Russia and India 10 billion dollars each, and South Africa up to 4 billion dollars. Summit chaircountry Mexico also pledged 10 billion dollars. Korea had announced its contribution of 15 billion dollars at the April G-20 meeting of central bank heads and finance ministers.

IMF Managing Director Christine Lagarde said, “Many member countries have joined the effort to stabilize the global financial crisis,” adding, “New funds will be used in the second crisis management fund to meet the needs of all member countries.”

The pledge by the five emerging economies to provide additional contributions to the fund is related to voting rights over which member countries are locking horns. So whether Western countries that hold sway over the fund will accept the pledge is unclear.

Separately, the G-20 heads of state ended their two-day summit Tuesday and adopted the G-20 Los Cabos Declaration.

The draft of the statement obtained by foreign media such as the Associated Press, Reuters and Bloomberg said the heads of G-20 countries promise to adopt all policy measures necessary to boost demand of the global economy, support its growth, and recover trust.

On the European financial crisis, G-20 leaders sought to include an action plan on growth and jobs in the statement. The plan urges job creation and growth strategies through fiscal spending instead of budget cuts, the AP said.

According to Reuters, the statement also urges the establishment of a bank alliance to boost the level of integration between banks in the eurozone. In addition, the statement is known to have said G-20 countries look forward to seeing cooperation between the new Greek government and other European countries.

The summit saw a war of nerves between European and non-European countries Monday. On the focused attention of G-20 leaders to the eurozone, European Commission President Jose Manuel Barroso told a meeting the day before the summit, “The origin of the (European crisis) is North America,” suggesting that the 2008 collapse of the U.S. investment bank Lehman Brothers triggered the latest crisis in Europe.

Expressing his displeasure, Barroso said, "Sometimes it takes a long time to resolve a problem since we (eurozone countries) are democracies," adding, "European leaders haven’t come to the G-20 summit for lectures."

German Chancellor Angela Merkel also urged G-20 leaders to “do their own homework.”

British Prime Minister David Cameron also demanded that the European Central Bank and powerful eurozone countries make more efforts.

Guillermo Ortiz, former governor of Mexico`s central bank, also said, “The intervention of the European Central Bank can put out the crisis almost immediately.”

witness@donga.com january@donga.com