IMF looks to boost funding without US assistance

By Peter Schroeder - 01/18/12 03:14 PM ET

The International Monetary Fund (IMF) is looking to bolster its funds to help steer Europe through its debt crisis, but the United States is not expected to help in that effort.

IMF Managing Director Christine Lagarde announced the global organization was looking to increase its funding resources by up to $500 billion, due in large part to help address continuing debt struggles on the European continent.

Although Europe's economic struggles are thought to be a primary threat to America's fledgling economic recovery, a Treasury Department spokeswoman said Wednesday the United States is not looking to help expand the IMF's wallet.

"Europe has the capacity to solve its problems," said Kara Alaimo, an international affairs spokeswoman for the Treasury. "The IMF cannot substitute for a robust euro area firewall. We have told our international partners that we have no intention to seek additional resources for the IMF."

Instead, Europe itself is expecting to play a leading role in helping to round up funds beefing up the IMF's reserves, which currently sit at roughly $385 billion.

“Based on staff’s estimate of global potential financing needs of about $1 trillion in the coming years, the Fund would aim to raise up to $500 billion in additional lending resources. This total includes the recent European commitment of about $200 billion in increased Fund resources," said a spokesman. "At this preliminary stage, we are exploring options on funding and will have no further comment until the necessary consultations with the Fund’s membership have been completed.”

The U.S. government has urged Europe to get a handle on its debt crisis, and backed efforts by global groups like the IMF to help in that regard. The United States is the largest single contributing nation to the IMF, and agreed with other nations in 2009 to help augments its funding by $100 billion. But since the debt crisis has developed abroad, the Obama administration has regularly maintained that Europe has the ability to deal with its problem without American assistance.

Republicans in Congress have grumbled for months about the exposure of U.S. funds to Europe's woes via the IMF. Republicans in both chambers have introduced legislation that would prohibit the use of American dollars contributed to the IMF in assisting Europe.