IMF chief hails G20 commitment to stability fund

MEXICO CITY - Christine Lagarde, managing director of the International Monetary Fund (IMF), said Monday that she was pleased with the contributions from the Group of 20 (G20) countries to a global financial stability fund.

"In Tokyo we signed agreement to deliver nearly $290 billion to the fund," Lagarde told a press conference on the sidelines of the G20 finance ministers and central bank governors meeting in Mexico City. "Around 100 billion more is due within the next weeks. We are now north of 80 percent of committed increase to IMF funds."

The G20 committed itself to loaning the IMF an additional $461 billion at its meeting in the Mexican resort city of Los Cabos earlier this year. The formal funding agreement was finalized on the sidelines of the IMF and World Bank meetings in Tokyo.

Finance ministers and Central Bank governors of G20 countries met in Mexico City on Sunday and Monday to debate a wide range of issues, with a looming fiscal crunch in the United States and the ongoing European debt crisis on tope of their agenda.

Largarde urged the United States to move quickly to address the so-called fiscal cliff -- a package of tax increases and spending cuts to be adopted if US legislators fail to agree on a budget by January. The program, set to begin on Jan 1, would cause a 1.3-percent decline in the US economy during the first six months of 2013, according to US estimates.

"The US needs to show leadership and quickly address the fiscal cliff and debt credibility," Lagarde said. "This is a clear factor of uncertainty going forwards for the US economy, and for the economy of the world as a whole."

Her remarks echoed those of the whole G20 which said in a statement Monday that "the United States will carefully calibrate the pace of fiscal tightening to ensure that public finances are placed on a sustainable long-run path while avoiding a sharp fiscal contraction in 2013."

Lagarde also praised what she described as "Mexico's efficiency" on Europe.

The G20 statement said that its members were happy with the results seen in Europe where a series of economic reforms are under way to stabilize and better supervise its banking system in the face of debt crises in Portugal, Ireland, Italy, Greece and Spain.

"The euro zone remains a concern for the world economy," Largarde said. However, nations in the firing line have to seek a mix of policies to restore confidence that matches their needs and abilities.

The G20 conference was the last major event chaired by Mexico before the country hands over the G20 presidency to Russia.