G20 tells European nations to reassess funding needs

Without making any firm commitment to bailout debt ridden European countries, the G20 Ministers have asked Euro zone nations to reassess the funding needs by March so that a decision could be taken regarding the quantum of support that can be provided by the IMF.

"Euro area countries will reassess the strength of their support facilities in March. This will provide an essential input in our ongoing consideration to mobilise resources to the IMF," said the communique issued at the end of the two-day meeting of G20 Finance Ministers and Central Bank Governors.

The ministers of the G20 nations, which include both rich and developing countries, are expected to take a view on enhancing the resources of International Monetary Fund (IMF) at their meeting in Washington in April on the sidelines on the IMF-World Bank Spring Meetings.

The G20 members, the communique said, have been actively engaged in taking the steps needed to safeguard the global financial system and to avoid adverse scenarios.

"We are reviewing options, as requested by leaders [of the G20 nations], to ensure resources for the IMF could be mobilised in a timely manner. We reaffirmed our commitment that the IMF should remain a quota-based institution and agreed that a feasible way to increase IMF resources in the short-run is through bilateral borrowing and note purchase agreements with a broad range of IMF members," it added.

US Treasury Secretary Timothy Geithner has said that the G20 is committed to making sure that the IMF has the resources it needs to help its members deal with the risks from Europe.

"There is broad agreement that the IMF cannot substitute for the absence of a stronger European firewall and that the IMF cannot move forward without more clarity on Europe's own plans," Geithner said.