As the last week’s euro zone bailout package appears to be on a shaky ground, with Greece looking set to go for a popular count and Portugal already seeking changes, India and other BRIC nations are likely to favour an International Monetary Fund-sponsored package over bilateral rescue deals. China, with whom Europeans have been in talks for a possible assistance, though, is yet to reveal its cards.
Leaders of BRIC nations were likely to meet early Thursday morning in Cannes to discuss a possible common stand on the last week’s euro zone bailout package ahead of the opening of G-20 summit later in the day, an official said. Though a meeting has not been scheduled as yet, India has already indicated its preference for the IMF route.
Other members of BRIC grouping, Russia and Brazil too have showed a preference for the IMF route. While so far India has not been approached by any of the troubled European nation for assistance, Montek Singh Ahluwalia, deputy chairman, Planning Commission and India’s sherpa at G20, had indicated over the weekend that it considered IMF as the right forum for a financial bail-out if the European Union is unable to bail themselves out. “Any new arrangement has to primarily come from within Europe. If that is not enough, they will need to go to IMF. India certainly wants to get Eurozone out of the crisis,” another senior official on Wednesday said.
Arkady Dvorkovich, economic advisor to Russian president Dmitry Medvedev, too said on Monday that Russia would consider providing bilateral assistance to the EU but would prefer it to be routed through IMF. On a more strident note, Brazilian finance minister Guido Mantega has ruled out any bilateral lending to EU except through IMF.
Though it is certain that the European debt crisis would take over the G20’s development agenda, the leaders are expected to take up the issue of growth and job creation alongside reforms of the international monetary system in the first working session on Thursday. The grouping, representing 90 per cent of the global GDP, will be sending out a signal for putting in place concrete plans to handle economic crisis.
The second working session would focus on development and trade. It is expected that a development roadmap prepared by Microsoft chief Bill Gates would be presented to the leaders during this session. Gates was earlier invited by Sarkozy to present the paper.
Global governance that is top on the Indian leadership’s mind would come up for discussion during the working dinner on Thursday. The relevance of reforms in international financial and monetary system in the current crisis will come up for discussion during this session.
Financial regulations, key to stronger markets globally, will be the agenda for next morning’s working session. It will be followed by a working session on climate change and agriculture, and another one on the social agenda including the fight against corruption.
It is not clear at the moment how India plans to register its concern on inflationary pressures on its economy. Singh is likely to make a mention of the developing world’s concerns in his address. How far India is able to push these concerns on to the official communiqué will depend on its ability to muster enough support from other countries whose primary concern lie in the spiraling domestic prices rather than the Europe induced sovereign debt crisis.
Though the G20 official communiqué to be adopted Friday afternoon so far has growth and jobs as its primary theme, a new IMF credit line is expected to be announced bringing comfort to the troubled European Union.
