Warning on US share of IMF funding for Italy and Spain

CNN carried a very careful and detailed report on funding for the IMF in the run-up to the New Year, neatly concentrating on an area certain to be a major issue over the coming days. The article, by Desmond Lachman, is linked from here, and it concludes as follows:

Judging by the IMF's European bailout programs to date, if Italy and Spain did have to go to the IMF for large-scale financial support, the exposure of U.S. taxpayers to those two countries could be very large. Indeed, IMF lending commitments to Italy and Spain could be of the order of $750 billion and $450 billion, respectively. Given the U.S.'s 17¾% share in the IMF, the U.S. taxpayers' exposure to Italy and Spain as a result of IMF lending could be on the order of $220 billion.

Considering the size of the exposure that might arise from IMF lending to the European periphery, the administration owes it to the U.S. public to be up front about the potential cost to the U.S. taxpayer of such lending. At the very least, the administration should call the Europeans on their attempt to bail out the European periphery by using, in significant part, U.S. taxpayer money.

Britain has not yet clarified its position over the €30 billion it is slated to provide towards the next tranche of supposed EU funding, agreed 8/9th December for two hundred billion euros.