Congress approves IMF funding
U.S. to allocate $18 billion for global rescue operations, with conditions
REUTERS
WASHINGTON, Oct 14 — Republican congressional leaders said late on Wednesday they have agreed to give $18 billion to the International Monetary Fund to bail out economies swept up in the global financial crisis.
REPUBLICANS AGREED TO the budget allocation, in exchange for promises from the Clinton administration to push through changes in the way Washington-based lending agency does business, House of Representatives Speaker Newt Gingrich, a Georgia Republican, told a news conference.
The agreement was a major victory for the White House, which has been desperate to shore up confidence in the IMF at a time when markets worldwide have been badly shaken by the worst global financial crisis in decades. The crisis has battered economies in Asia and Russia and has spread to Brazil and other Latin American nations.
Under the congressional compromise, the IMF would be forced to charge crisis-hit countries more for loans, to demand quicker repayment on some loans and to give the public and the Congress more information about its policy decisions. Gingrich said these Republican-demanded reforms would bring the “IMF under control” and make it accountable.
The $18 billion package must still be approved by the House and the Senate as part of a catchall government spending bill.
Once the U.S. payment is approved by both houses of Congress, other nations will chip in their share to replenish IMF coffers drained by bailouts for Russia, Indonesia, South Korea and Thailand.
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