"At present, we have started talks with countries to see how many countries are willing to contribute and if they would, in what way," IMF Deputy Managing Director Naoyuki Shinohara told a news conference. "Countries, including emerging nations, understand the need to boost a global institution such as the IMF at a time when Europe's problems could affect countires outside the euro zone in a major way," Shinohara said when asked about emerging nations' roles.
The IMF is seeking to more than double its war chest by raising $600 billion in new resources to help countries deal with the fallout from Europe's financial crisis, but the plan faces roadblocks from the United States and other countries. China and other countries beyond the 17-country euro bloc want to see its members stump up more money before they commit additional resources to the IMF. But Chinese Premier Wen Jiabao said on Thursday the world's No. 2 economy is considering increasing its participation in the European rescue funds aimed at resolving the debt crisis. Shinohara, a Japanese national, also said he understands Japan is also making various consideration on the matter as an important partner of the IMF and as its exports are being hit by the global slowdown in the face of the euro zone crisis. He repeated the IMF's view that Japan needs to set a path for sustaining its public finances longer term and to triple the sales tax to 15 percent, rather than doubling it, in order for its debt-to-GDP ratio to start declining during this decade.
Prime Minister Yoshihiko Noda has vowed to double a 5 percent sales tax in two stages by October 2015 to help fund bulging social security costs, which are rising by 1 trillion yen ($13.13 billion) a year and aggravating a public debt already twice the size of Japan's $5 trillion economy. Shinohara took part in high-level discussions among 18 Asia-Pacific countries on the tax system in Tokyo, which ended Friday.
