Japan and China will seek to co-ordinate on supporting the International Monetary Fund’s (IMF) effort to contain Europe’s sovereign debt crisis, Japanese Finance minister Jun Azumi said.
“Rather than make decisions independently, we’ve agreed to consult each other very closely” on financial contributions to IMF, Azumi told reporters on Sunday after meeting with Chinese Finance minister Xie Xuren in Tokyo.
The finance ministers of Asia’s two largest economies met before the Group of 20 countries gathering later this month in Washington. One topic at the G-20 meeting will be increasing cooperation with International Monetary Fund. The Fund needs more resources to shield the global economy from threats of strains on Europe’s financial system, rising oil prices and high unemployment, Managing director Christine Lagarde said this week.
“It won’t probably be smooth for G-20 nations to hammer out details for their contributions to the IMF,” Tomoko Fujii, a senior foreign-exchange strategist at Bank of America Merrill Lynch in Tokyo, said before Azumi and Xie met.
“It’s important for Japan to check China’s intention on this, while China probably wants to increase its political influence if it puts up money.” The Fund asked in January for as much as $500 billion in additional lending resources. Member countries have been reluctant to pitch until European nations did more to help themselves. The US has refused to increase its contribution to the fund.
European finance ministers decided March 30 that 500 billion euros ($667 billion) in fresh money would be added to the 300 billion euros already committed to create an 800 billion-euro defense against the two-year-old turmoil.