Eurozone Debt Crisis: New Venue, Old Problems – OpEd
By VOR
By Maria Vesnovskaya
The eurozone debt crisis will top the agenda of the G20 finance ministers’ meeting in Mexico. This year Mexico is presiding in the G20 Group. Russia will be represented at the forum by Finance Minister Anton Siluanov.
One of the main issues on the agenda of the forum is an increase in IMF reserves. It is believed that $600bn is needed to boost the size of the Fund to $1trn. The reserves will be used to help crisis-hit countries, first of all, Greece, the most “ailing” of EU economies. Last week, the EU, the European Central Bank and the IMF came to a final settlement on granting a €130bn bailout package to Athens.
The US and Canada are against boosting the IMF resources. They believe that the eurozone should use its own anti-crisis mechanisms. Two BRICS countries, India and China, insist that their contribution to the IMF should guarantee them a higher status within the organization. Russia repeatedly expressed readiness to contribute to the IMF’s capital. Russia’s Finance Minister Anton Siluanov has pointed out that Moscow could adjust its position to match the positions of other countries. The expansion of the IMF reserves has been on the agenda since 2011, when Italy and Spain found themselves on the verge of default after Greece. Analyst Yelena Turzhanskaya comments.
“The participants in the Mexico summit are bound to engage in a large number of heated discussions. This is because hefty resources are needed to rescue the eurozone. Russia has made it clear that the volume of its potential contribution will be no more than $10bn. As for the global economic crisis, the summit is unlikely to generate any new ideas because the EU summit in October adopted all necessary decisions and they have already produced an effect.”
Most experts are sure that the forthcoming summit will suggest nothing new for rescuing the eurozone. As markets anticipate positive signals from crisis-affected economies, its decisions are unlikely to make a difference. A Voice of Russia correspondent met with economist Roman Andreyev.
“The participants in the summit will surely make a large number of statements concerning the future of the eurozone. But the main issues will be resolved at a meeting of the EU heads of state. The maximum outcome to be expected of the summit is an agreement on reconsidering the budget deficits for this year, which will help countries, such as Italy and Spain.”
The two-day summit in Mexico may also consider Russia’s initiative to set up an international council for the accreditation of ratings agencies. The Mexican leadership deems economic stability to be the priority of its G20 presidency. President Felipe Calderon has called for a clear-cut strategy to contain spending so that the problem of temporary liquidity did not lead to the insolvency of certain large countries. The G20 summit will take place in the Mexican resort of Los Cabos.
