EU leaders pushed Friday for a doubling of the International Monetary Fund’s lending resources to $500 billion to help avert future crises, and pledged to pitch in about a third of the increase.
EU Commission President Jose Manuel Barroso and other officials announced the agreement at the end of a two-day summit among leaders of the 27 EU member states that focused on efforts to stop a worsening European recession.
“Europe is showing it’s up to the challenge,” Barroso said.
EU leaders said the bloc itself would provide between 75 billion and 100 billion euros in additional loans to the IMF.
A final decision on reforming the IMF will be made at a meeting of the Group of 20 leading industrialized and developing countries in London on April 2. That gathering is meant to find antidotes to the worsening downturn.
EU officials resisted calls for increasing economic stimulus efforts at the G-20, instead stressing the need for greater regulation and more money for the IMF.
“The G-20 summit is about getting a better regulation of the international capital markets, and there is a need for that,” Czech Prime Minister Marek Topolanek said.
The leaders said that coordinating international action was key, even if it meant sharing more power with emerging economic powers like China, India and Brazil at international organizations like the IMF.
The EU argues the IMF, created during the closing days of World War II, needs a greater role in surveillance and in providing more funds for emergency loans to countries in financial trouble.
The EU leaders also agreed to double funds meant to bail out struggling member states to 50 billion euros ($68 billion). Topolanek, whose country holds the EU presidency, said the money is meant for “countries that are particularly hit by the crisis” and that do not use the euro currency.
Hungary and Latvia have already received 9.6 billion euros from the fund, which raises money by selling bonds. Romania is now also seeking a bailout from the EU and the International Monetary Fund.
The EU leaders were also to issue a call to others to keep markets open and “avoid all form of protectionist measures” and to try again to revive stalled world trade talks.
The specter of protectionism threatened to overshadow the EU leaders’ efforts for a common front at the G-20, however, as France’s Renault SA announced it would move excess production from a car plant in Slovenia to a French site and create 400 French jobs in the process.
France recently won EU regulatory approval for an auto industry bailout but has been repeatedly warned against using it for protectionist measures.
The EU leaders also agreed to spend 5 billion euros ($6.8 billion) of unused EU budget funds for new power grids and green energy.