G20 leaders fail to agree on how to boost IMF

Published : Nov 4, 2011 - 22:20 Updated : Nov 4, 2011 - 22:21

CANNES, France (AP) -- Leaders of the world's 20 most powerful economies failed to agree on how to increase the firepower of the International Monetary Fund, so that it can help stem the European debt crisis, though they acknowledged its resources should be boosted.

The leaders struggled to reach concrete resolutions at their summit in the French resort of Cannes that has focused on Greece's political turmoil and worries about Italy that are threatening the world economy.

``It's important that the IMF sees its resources reinforced,'' European Commission President Jose Manuel Barroso told reporters.

European Council President Herman Van Rompuy, left, and European Commission President Jose Manuel Barroso participate in a media conference at a G20 summit in Cannes, France on Friday. (AP-Yonhap News)

   He said that Italy had also asked the IMF for help monitoring its budgetary and structural reforms. Doubts have grown over whether Italian Prime Minister Silvio Berlusconi will have the political strength to implement promised reform measures meant to revive the country's lackluster economy and bring down its massive debt.

   Leaders of the world's biggest economies were focusing on strengthening the IMF as they scrambled for ways to help Europe contain its raging debt crisis without worsening their own money troubles. European and non-European countries disagree about how to better use the IMF _ the institution that was set up as the lender of last resort for struggling governments after World War II _ to help.

   With their own finances already stretched from bailing out Greece, Ireland and Portugal _ and traditional allies like the United States wrestling with their own problems _ eurozone countries are looking to the IMF to use its resources and rescue experience to help prevent the debt crisis from spreading to large economies like Italy and Spain.

   But within the IMF, the powers have shifted.

   Until two years ago, the IMF _ dominated by the traditional powers in Europe and the U.S. _ mostly applied the painful adjustment programs that are attached to its financial lifelines to poor and emerging economies in Asia, Latin America and Africa.

   Now, it's growing powers like China, Brazil and South Africa that have to decide whether helping Europe is a worthy investment.