U.S. Treasury's Lew presses Congress on IMF funding
WASHINGTON, April 24
WASHINGTON, April 24 (Reuters) - U.S. Treasury Secretary Jack Lew on Wednesday urged Congress to permanently boost U.S. funding for the International Monetary Fund, saying it is in Washington's interest to maintain its influence in the global lender.
The Obama administration wants Congress to shift $63 billion from an IMF crisis fund to the Fund's general accounts to maintain U.S. power at the international lender, but it has been a tough sell to U.S. lawmakers during a tight budget year.
"I spent much of my professional life making tough budget choices, and I can say without reservation that we must continue to invest in the IMF," Lew told a U.S. House of Representatives subcommittee. "The IMF's balance sheet is rock solid."
He said the assets of the IMF still outstrip its credits to countries in the euro zone that are deep in debt, including Greece and Cyprus.
Lew served as the budget director under President Barack Obama and former President Bill Clinton.
Congressional approval of the IMF funding changes is necessary to complete reforms at the lender that the international community has already agreed upon to boost the voting power of emerging economies. The reforms would make China the IMF's third-largest member.
The reform of the votes, known as quotas, cannot proceed without the United States, which holds a controlling share of IMF votes. Under the reform, U.S. voting power would decrease slightly but it would still maintain its veto.
"There are other countries that would be happy to increase their quotas and eliminate the U.S. veto," Lew said. "So, I think it's a matter of urgency that we have these reforms ratified."
He said IMF funding helps preserve U.S. business interests, by pushing for a level playing field for U.S. companies, and protects U.S. national security by promoting economic stability in fragile states that could descend into political upheaval.
Washington's foot-dragging on IMF funding came under criticism at last week's meetings of the IMF and financial officials of the Group of 20 nations.
"Frankly speaking, some of us are losing patience already. The decision of this nation is very important for all," Russia's deputy finance minister, Sergei Storchak, said last week, referring to the United States.
But U.S. lawmakers on Wednesday made no firm commitments. Representative Kay Granger of Texas, the chair of the House subcommittee that deals with appropriations for U.S. foreign programs, said the money for the IMF crisis fund could not be shifted to pay for a larger U.S. share since the funds were only approved for emergency appropriations in 2009.
Granger also said it was unclear that U.S. support for multilateral development institutions was effective.
"Funds are more difficult to track when they go through multilateral institutions rather than through bilateral assistance programs," she said.