US rejects plan to strengthen IMF in euro zone crisis

Plan with the backing of several developing economies hits the buffers as the US tries to keep pressure on Europeans to end their two-year debt crisis

Proposals to double the size of the IMF as part of a broader international response to Europe's debt crisis ran into resistance from the United States and others, burying the idea for now and putting the onus firmly back on Europe.
The outlines of the plan that had the backing of several developing economies emerged as G20 finance ministers and central bankers met in Paris to discuss a world economy under threat from European nations mired in debt.
A second day of talks on Saturday may produce more robust language on the urgency of tackling the euro zone debt crisis but little of substance is likely to be inked in with an EU summit in nine day's time the make-or-break moment.
A communique and round of closing news conferences are expected around 1500 GMT with other decisions set up for a G20 leaders' summit in Cannes on 3 and 4 November.
One G20 source said emerging market policymakers backed injecting some $350 billion into the International Monetary Fund.
U.S. Treasury Secretary Timothy Geithner and his Canadian counterpart poured cold water on the idea. The IMF's dominant shareholders, including the United States, Japan, Germany and China, are content that the fund's US$380 billion worth of resources is enough.
"They (the IMF) have very substantial resources that are uncommitted," Geithner said.
German Finance Minister Wolfgang Schaeuble agreed the euro zone debt crisis was for Europe to solve, and expressed confidence that EU leaders would produce a plan at the 23 October summit that would be convincing for financial markets.
The United States is among countries keen to keep pressure on the Europeans to act more decisively to end the two-year-old debt crisis that began in Greece but has since spread to Ireland and Portugal and is lapping at Spain and Italy.
"The first priority here is for Europeans to put their own house in order," Australian finance minister Wayne Swan said, though his office inCanberra later released a transcript of a CNN interview in which he added that the G20 should be willing to support extra IMF resourcing if required.
Canadian Finance Minister Jim Flaherty also said the G20 should keep up pressure on the euro zone on its "arduous" journey towards a solution and not focus on IMF resources.
If minds needed concentrating further, Standard and Poor's cut Spain's long-term credit rating, citing the country's high unemployment, tightening credit and high private sector debt, highlighting the risk of a much larger economy than Greece coming under threat.
French and German officials are trying to put flesh on the bones of a crisis resolution plan in time for the European Union summit.
Fears about the damage a default by Greece -- and possibly others -- could inflict on the financial system have driven a confidence-sapping bout of market volatility since late July, with global stocks falling 17 per cent from their 2011 high in May.