The IMF is “considering” a plan to back a special purpose investment vehicle (SPIV) that would leverage the European Financial Stability Facility, according to Reuters.
Analysts have been chattering about the size of IMF involvement in the eurozone bailout, but this is the first confirmation that the fund is actively thinking about playing an even bigger role than it is now.
That would equate with a substantial contribution from the U.S., by far the largest IMF subscriber, with a quota of 17.72%.
This will no doubt be a major topic of discussion at the G20 meetings in early November.
Under the plan, an SPIV created by the EFSF that would issue debt. Then the IMF could purchase that debt, providing more funds to the EFSF. One Reuters source even said the fund was willing to set up an administrative account, that would allow IMF shareholders and maybe even sovereign wealth funds to accumulate money to help the eurozone.
This “consideration,” however, is by no means a confirmation that the IMF will definitely be more involved.
Indeed, the U.S. has opposed amping up the size of the bailout plan in the past, with support from Canada and Australia. The U.S., Japan, Germany, and China said they were confident the fund’s $380 billion resources were sufficient at a meeting of G20 finance ministers earlier this month.
“The IMF has indicated that they are considering it — they have not taken a position,” a eurozone official told Reuters. “It will all depend on the whole package.”