New Delhi: Finance Minister Pranab Mukherjee on Monday said European nations will have to find their own solution to the problem of sovereign solvency and make a credible assessment of liquidity needs. (Agencies)
"The convergence of views from the deliberations of finance ministers in the G-20 is that so far as sovereign debt is concerned, the issue of sovereign solvency ought to be resolved by the Europeans themselves," Mukherjee said at an Asian Development Bank (ADB) seminar here.
Mukherjee returned on Sunday after attending the two-day meeting of G-20 Finance Ministers and Central Bank Governors.
European leaders are meeting on October 23 to work out a solution to their sovereign debt problems.
"We ought to wait for the outcome of October 23 summit of the European Union... It is for them to make a credible assessment and, therefore, to make their recommendations how they are going to address their issue (and) what expectations they have from the international community to supplement their efforts," he added.
The outcome of the summit of European leaders will be taken into consideration by the G-20 leaders, who are scheduled to meet at Cannes in France on November 3 and 4.
Several European nations, including Greece, Portugal and Spain, are facing financial problems and a sovereign default is expected to have a severe impact on the whole region.
In view of the pending European summit, Mukherjee said the G-20 ministerial meet refrained from making any specific recommendation for the leaders' meet at Cannes. On augmenting the resources of the IMF, the minister said it should not be done at the cost of hampering the ongoing quota reforms, which should be completed by 2012.
"There was a discussion on augmentation of IMF resources. It was decided upon that the IMF resources should be augmented to meet the challenges if it is called for, but not by stopping loans.”
"Quota reforms of the IMF would be completed by 2012 so that the process should remain unhindered... Resource augmentation not only of the IMF, but also of the World Bank will have to be taken up seriously and the countries concerned will have to find a mechanism through which they can do that," Mukherjee added.
Following the quota reforms, the voting power of developing countries, including India, will go up.
Making a case for augmenting the resources of the World Bank along with the IMF, Mukherjee said the bank had made a substantial contribution in helping developing nations to come out of the global financial crisis of 2008.
The annual lending of the World Bank is projected to come down from about USD 44 billion to USD 15 billion by 2013.
New Delhi: Finance Minister Pranab Mukherjee on Monday said European nations will have to find their own solution to the problem of sovereign solvency and make a credible assessment of liquidity needs.