Why this unconditional bailout for EURO ZONE countries ?

[sehwag1830]

I mean IMF is giving 430 billion $ to EU countries . Do you think IMF would have given India even a single billion $ without India pledging something to IMF. We had to give our Gold in 1991. Are EU countries giving something in return ?

 

[satish007]

The world is control by white,if they get poor,they will mad and destroy us. They looks kind now because they have robbed whole world and get rich.white men are worst guys,they made us hate and they enjoy.

 

[ejazr]

Its not unconditional, but its certainly at easier terms than Asian or Latin American countries got their deals.

The main reason is that EU, Japan and the US continue to hold the majority voting quota in the IMF and World Bank and can vote a certain way. Emerging countries form Asia, Africa and Latin America will have to co-ordinate and press for a more equal sharing of voting power and now is the best time to do it. Its a once in a lifetime crisis oppurutnity to rebalance the voting quotas.

 

[Payeng]

I just wonder why their is not an Asian Union or Eurasian Union (Russia included) otherwise.

 

[SLASH]

They need to decrease their welfare funding. You can't be in recession while your citizens continue to have top notch funding.

 

[thakur_ritesh]

Ejaz has given the answer. The real deal at IMF and why we and the other developing economies are chipping in is because we all want an enhanced share of those voting rights. A lot of these European countries are going down and can't chip in, so their voting share is to be downgraded, and the same will then be distributed, which is where the emerging economies, who have their own ambitions, come in.

With the 20b usd already committed, one can hope we can get the economy back on track and then further commit another 15b usd, and then look for that additional enhanced voting share, because without a doubt, the voting rights will again be revised.

Why is it the Europeans don't get as bad a deal? Hear have a look at the voting rights composition:

Just the G7 (USA+Canada+Japan+Italy+France+Germany+the UK) add up to 43.09% of the total, and these are just the G7, there are so many more. This tells us, the IMF is a property of the Americans, Japs and the Europeans.

IMF Members' Quotas and Voting Power, and IMF Board of Governors

BRICS, earlier BRIC, had this challenged in 2011, when these emerging economies got enhanced voting share to what they had earlier. Today the 5 add up to 11.03%, and are definitely targeting closer to 15% share or more. If I am not mistaken, China demands a share of more than 6% which should place it right next to the US and Japan, or if they can get a good deal, then ahead of Japan.

Now India had pushed for an alternative, a bank by the BRICS, but then with the sheer size of the Chinese economy, it became clear they would be the dominant partner, so for now that idea has not taken off, and an alternative without them doesn't make sense.