IMF aims to raise $500 bn as euro crisis rages

The International Monetary Fund said Wednesday it would seek up to $500 billion in new financial firepower as the European debt crisis increasingly threatens the global economy.With several European countries veering on recession and Greece on the brink of default, the IMF said it lacks the resources to be the planets lender of last resort.Based on staffs estimate of global potential financing needs of about $1 trillion in the coming years, the Fund would aim to raise up to $500 billion in additional lending resources, it said in a statement.The IMF said the $500 billion includes the recent European commitment to add about $200 billion to its resources.At this preliminary stage, we are exploring options on funding and will have no further comment until the necessary consultations with the Funds membership have been completed, the 187-nation institution said.The United States, the biggest stakeholder in the IMF, reiterated that it would not ask Congress to boost the IMFs war chest.We continue to believe that the IMF can play an important role in Europe, but only as a supplement to Europes own efforts, Treasury spokeswoman Kara Alaimo said in an email to AFP.Europe has the capacity to solve its problems. The IMF cannot substitute for a robust euro area firewall, she said.We have told our international partners that we have no intention to seek additional resources for the IMF.The IMF funding statement followed an executive board meeting Tuesday to discuss the adequacy of its resources -- currently about $385 billion in available funds.IMF managing director Christine Lagarde said Tuesday that the discussion was held at the request of the membership and the general support of the Group of 20 major economies.Lagarde said the board had recognized the importance of making sure the Fund had enough resources to help defuse the current global economic weaknesses and regional challenges.The biggest challenge is to respond to the crisis in an adequate manner and many executive directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the euro area and protect economies around the world from spillovers, she said.Prodded last year by the Group of 20 major economies to increase the money it has for intervening in financial crises, the IMF has been exploring informally the issue for months.Eurozone leaders pledged in December to provide the IMF with bilateral loans worth 150 billion euros ($192 billion).