IMF Funding

Carl Remick cremick at rlmnet.com
Wed Oct 7 08:39:08 PDT 1998


Re Michael's: "It looks like we have a left--right alliance not to fund the IMF. The left thinks the IMF actions are distructive the right thinks American money is wasted. This is probably a good thing. Without American Funds the G7 will probably want non--American leadership (no cure all but can't be much worse than the present)."

This global turmoil *is* having a refreshing hegemony-busting effect. Interesting article in today's NYT re this. Lead runs as follows:

Europeans Challenge U.S. in Economic Crisis

By RICHARD W. STEVENSON

WASHINGTON -- After more than a year on the sidelines, European governments are challenging the United States over how to address the world financial crisis, suggesting that new ideas and leadership are needed as the turmoil persists and Congress continues to block new funding for the International Monetary Fund.

In ways both subtle and overt, European officials have used this week's gathering of finance ministers and central bankers here at the IMF and the World Bank to remind the United States that they represent an economic power to be reckoned with, and one with the authority to be listened to on the world stage.

By flexing their muscles, Europeans are shedding their traditional deference to the United States on global financial policy as they prepare for a new era in which most of Europe will be bound into a single economic unit by a common currency.

Consumed by high unemployment and other economic problems at home, and unconvinced initially that the crisis that began last year in Asia would have much effect on them, European countries stayed largely in the background over the last year as the United States worked closely with the IMF to keep the turmoil under control.

But in the last several weeks and during the meetings here in the past few days, they have proposed shifting more power into a committee within the IMF, a move that could have restricted the ability of the United States to exert its influence directly over the fund's management.

They have given far more enthusiastic consideration than the United States to efforts by the World Bank to shift the focus away from austerity programs to poverty-fighting and to challenge the orthodoxy that controls on the international flow of capital are always a bad idea.

With their own economies strengthening after years of stagnation, European officials even dared to criticize domestic politics and policy in the United States, which for the last five years has not been shy about lecturing the rest of the world about how to achieve prosperity and stability. At the top of their list was the unwillingness of the Republican-controlled Congress to provide the full $18 billion in new funding for the IMF requested by President Clinton.

[end of excerpt]

Carl Remick



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