April 20, 2012 / 3:58 AM / 7 years ago

Japan says IMF to meet $400 billion target to boost firepower

WASHINGTON (Reuters) - The International Monetary Fund is likely to achieve the touted $400 billion boost to its financial firepower as more countries signaled readiness to contribute funds, Japan’s finance minister said, in a sign the G20 has made progress in building up a global firewall to contain the euro zone debt crisis.

The IMF may even manage to collect more than the $400 billion target when including countries that cannot make a firm commitment now but are willing to contribute later, Jun Azumi told reporters after attending the Group of Seven and Group of 20 gatherings in Washington on Thursday.

“It now looks likely that $400 billion can be achieved, a result of Japanese and IMF calls for support from other countries,” Azumi said.

“More than a dozen countries said that given Japan has pledged funds, they would do the same,” he said, adding that many G7 and G20 members said they thought now was the time to boost the IMF’s firepower and nurture confidence in the global economy.

IMF funding was at the top of the agenda when finance ministers and central bankers from the G20 advanced and emerging economies were holding a dinner on Thursday night, ahead of a longer session on Friday.

The global lender’s bid to win a big boost in funding to handle the euro-zone debt crisis appeared to hit a speed bump on Thursday when Brazil demanded more power at the IMF for emerging economies as a condition for lending it extra cash.

But Naoyuki Shinohara, the IMF’s deputy managing director, said some emerging economies are expected to examine contributing funds to the IMF, even if they do not go as far as making firm commitments this weekend.

Azumi said Europe has made progress in strengthening its firewall but that there was no room for complacency with markets still jittery due to debt problems in countries such as Spain.

“We’d like to create a big umbrella to protect the global economy and help achieve its stability,” he said.

Azumi also met with U.S. Treasury Secretary Timothy Geithner on Thursday on the sidelines of the G20 and IMF meetings. He said they discussed Europe’s debt woes but not sanctions on North Korea.

Reporting by Leika Kihara; Editing by Joseph Radford

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