India may not contribute to the IMF sponsored efforts to fund the next phase of Greek bailout. A hint on this is visible from the fact that Finance Minister Pranab Mukherjee will not be participating in the coming G20 meeting of the financial ministers scheduled to begin on February 24 in Mexico City because of the Budget preparation work at home.
India’s reluctance to join the IMF lead bailout initiative is to be read along with the attitude of other major G20 countries. On the previous day, Japan and China decided to contribute to the Euro-zone rescue efforts. The Japanese Finance Minister Mr. Jun Azumi hinted that Japan and China are ready to put money into the IMF to strengthen the next phase of the Greek bailout.
During the last month, the IMF has requested G20 countries for financial support so that they can help the EU to give loans to Greece and thus avoid a Greek default.
In the previous fund mobilization programme by the IMF, back in 2009, India contributed a moderate $10 billion compared to China’s $50 billion and Japan’s $100 billion. The stand of the country was that India is ready to subscribe to the quota of the IMF but is against giving outright loans to the Fund. Of course, the underlying reason for India’s stand is that foreign exchange reserve of nearly $300 billion is just enough to meet the country’s contingency requirements.
Greece needs around 130 billion euros or $170 billion to close its immediate debt maturing in April this year.
Greece needs immediate money without delay. This is essential at least to extend the debt ridden countries’ default. Fund procurement attempts for the second bailout programme is undergoing currently with active EU campaign. European leaders over the last week or so were making hectic efforts to mobiles funds including a visit by EU leaders to China- the world’s largest foreign exchange reserve holder.
Europe’s expectation about fund mobilization is that the G20 members-especially countries with huge foreign exchange reserve – China, Japan and South Korea will contribute to the EU efforts. Simultaneously, they hope that the other growing members of the group- India, Russia and Brazil also may be ready to take part in the exercise.