IMF To Seek Saudi Contribution To Europe Bailout Fund - Sources

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Thursday, Jan 26, 2012

(MORE TO FOLLOW) Dow Jones Newswires

26-01-12 2109GMT

Thursday, Jan 26, 2012

 
   By Summer Said 
   OF DOW JONES NEWSWIRES 
 

DAVOS, Switzerland (Dow Jones)--International Monetary Fund Managing Director Christine Lagarde will visit Saudi Arabia next month to request a contribution from the oil-rich kingdom to the IMF's $500 billion fundraising effort to fight the European debt crisis, according to two people familiar with the matter.

Saudi Arabia is likely to tell Lagarde that it is willing to increase its contributions to the IMF, but it will be seeking an increased say in the running of the fund in exchange for its contribution, one of the people said.

Lagarde will travel Feb. 1-2 to Tunisia, the epicenter of the so-called "Arab Spring" political revolution sweeping North Africa and the Middle East. She will then spend Feb. 3-4 in Saudi Arabia, the world's biggest oil exporter and a regional power center, an IMF spokesman said earlier Thursday

Earlier this month, the IMF said it is seeking $500 billion in new lending capacity in order to help cope with the effects of Europe's debt crisis. Members of the euro zone have said they will contribute about $200 billion, and the IMF is hoping for contributions from China, Brazil, India and other large emerging nations.

The Saudi government hasn't commented on its attitude to the IMF bailout fund though Prince Turki al Faisal, a former Saudi ambassador to the U.S., said earlier this week in Riyadh that Saudi Arabia and other prosperous emerging nations will want greater influence in the affairs of the IMF in exchange for any contribution.

Other rich emerging economies, such as China, have suggested that they would need either more power at the IMF--perhaps through increased shares at the fund--or trade concessions from Europe to give money to help the euro zone.

That could complicate any IMF fundraising effort because the leading IMF shareholders--including large European nations--have resisted any suggestion of giving up their power in exchange for more money. The U.S., which has said it won't provide any funds, is the IMF's largest shareholder and can block many major IMF changes.

In an interview in Davos, Saudi finance minister Ibrahim al Assaf said that any help for European nations would not come directly but via the IMF.

European nations "have approached the International Monetary Fund and member countries through the IMF. They are in continuous discussion with the IMF to get the help from the non-European members of the fund," he said.

-By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com

(END) Dow Jones Newswires

26-01-12 2117GMT