Japan pledges $60 billion to European firewall | Business| Economy and finance news from a German perspective | DW | 17.04.2012
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Japan pledges $60 billion to European firewall

Japan has offered $60 billion to the IMF as a contribution towards the eurozone's new economic safety net. Japan is the first non-eurozone country to pledge money towards the European Stability Mechanism.

International Monetary Fund President Christine Lagarde welcomed Tokyo's pledge on Tuesday to provide $60 billion (45 billion euros) towards the new eurozone rainy-day fund, the European Stability Mechanism.

"This is an important step…to prevent and fight crises and to promote global economic stability," Lagarde said in New York, where it was still late Monday at the time. "Japan has a longstanding record of helping others, and of supporting the IMF in its core mission of helping to support economic stability in all its member countries."

Japan is the second-largest stakeholder in and contributor to the IMF, after the United States.

The Japanese pledge of $60 billion, compared to the 200 billion so far contributed by eurozone countries, was announced by the finance ministry in Tokyo on Tuesday morning, three days ahead off a Group of 20 finance ministers' meeting where "fundraising" for the ESM is likely to top the agenda.

A ministry spokesman said Finance Minister Jun Azumi had announced the plans to lend the money "in order to strengthen the financial base of the IMF."

The government in Tokyo welcomed a recent European decision to bolster the total size of the fund to $700 billion from $500 billion, amid fears that economic problems in Europe would quickly spread across the world.

The European Stability Mechanism is the second iteration of an emergency fund inspired by the debt problems in Greece, Ireland and Portugal - all of whom have taken emergency loans from the EU and IMF in the last two years. Japan's announcement of support followed renewed fears concerning unemployment-wracked Spain, which on Monday saw the yields on its benchmark 10-year bonds jump above six percent for the first time since late last year.

msh/ccp (AFP, dpa)