bloomberg.com

ISLAMABAD: To tackle the ongoing global economic recession, the European Union has planned to provide $270 billion to the International Monetary Fund (IMF).

The EU leaders also laid out a new “fiscal compact” to prevent future debt run-ups and accelerated the start of a planned permanent 500 billion euro rescue fund.

The European Union leaders in a meeting in Brussels agreed to make bilateral loans to the IMF of as much $270 billion with 150 billion euros contributed by Euro zone members and 50 billion from other members of the EU.

These resources are expected to come from individual countries reserves when needed, mostly via their national authorities, to the Fund’s general resources. The EU’s exact contribution is expected to be finalized within the next 10 days. IMF Managing Director Christine Lagarde said the decisions taken by European leaders at their summit in Brussels is an important contribution to helping address the crisis facing the euro zone and strengthening the global economic recovery.

In a statement, the EU Council has said that “euro area and other Member States will consider, and confirm within 10 days, the provision of additional resources for the IMF of up to EUR 200 billion (USD 270 billion), in the form of bilateral loans, to ensure that the IMF has adequate resources to deal with the crisis. We are looking forward to parallel contributions from the international community.”(Online)