Reforms of the world’s financial system and aid for the Europe’s debt-stricken countries are in the spotlight of negotiations between the Russian president and IMF chief. Christine Lagarde is visiting Moscow to see if Russia can come to the rescue.
This two-day stay in Moscow is Lagarde’s first official foreign trip outside the European Union.The European public debt crisis along with Russia’s possible help for the bailout fund are said to be the dominate issues on the agenda of negotiations with President Russian president Dmitry Medvedev, the finance ministry and the central bank officials.
Lagarde’s visit follows last week the G20 talks in Cannes where it was agreed to prop up the International Monetary Fund. And the emerging economies like Russia, China, Brazil, India, and South Africa so-called the BRICS group, are ready to provide their help with the euro, something what the IMF looking for now. And BRICS leaders agreed to offer money to the eurozone, though the crisis does not directly affect the group.
The BRICS countries are lobbying for the reform of the IMF in the first place. And above all they are pushing towards redistribution of the IMF membership quotas by January 2014.
The sum of the possible bailout for the IMF has not been discussed yet, but Russia has pledged so far the extra funding being negotiated with Lagarde’s agency would be limited to $10 billion.
However, president Medvedev pointed out clearly that the help should be targeted and transparent, meaning that is should be provided not directly to the European countries, but through international financial institutions such as IMF.
Russia, being a member of the IMF since 1992, is one of major shareholders in the IMF. And as it keeps almost 45 per cent of its international reserves in euro, it is interested in helping the eurozone.
Russia paid the last portion of its debt to the international monetary fund back in 2005 and since then it has been contributing to the organization providing money for countries which economies experienced financial problems.
After the Moscow visit Lagarde will fly to China, which is ready to help with $100 billion help.