IMF returns to center stage
IMF Managing Director Christine Lagarde gestures as she addresses a press conference during the second day of the G20 Summit on November 4, 2011 in Cannes, France.
Kai Ryssdal: Don't look now, but the International Monetary Fund is hip again. Five or six years ago, when the world economy was going gangbusters, it almost seemed like the IMF wasn't needed anymore. But it's back.
At the G20 meeting that wrapped up in the south of France today, the IMF said it'd be happy to help out in Rome, if need be. Marketplace's Nancy Marshall Genzer has more.
Nancy Marshall Genzer: The IMF used to specialize in helping poor countries that were drowning in debt. Now the IMF is supervising Italy, one of the largest economies in the world.
Ted Truman is an international economist with the Peterson Institute for International Economics. He says the IMF's new role in Italy is unprecedented.
Ted Truman: And it's been a shock to the Europeans. They felt they could wash their own laundry, and that has proved not to be true.
The IMF will be rummaging through Italy's dirty laundry, issuing quarterly reports on whether Rome is falling behind on its promised financial reforms like raising the retirement age. The IMF will also be setting up some kind of EU emergency fund.
But the details still have to be worked out. Some of the money would need to come from newly rich countries like China and Brazil. Will they contribute? Alexei Monsarrat is an IMF analyst at the Atlantic Council.
Alexei Monsarrat: I don't think that anybody going around with a tin cup hoping for people to drop some pennies into it is going to get a whole lot of serious interest unless there is a very clear business case that it makes sense.
There's just not enough confidence that Europe can handle this alone. Mark Weisbrot is co-director of the Center for Economic and Policy Research. He says China is being extra cautious.
Mark Weisbrot: It doesn't make sense for them to be risking very much for Europe, but on the other hand, they have $3 trillion of reserves. They could do something.
He says the IMF could give China the reassurance it needs.
In Washington, I'm Nancy Marshall Genzer for Marketplace.