IMF head Christine Lagarde said Thursday that it would be able to boost its crisis intervention capacity this week as worries mounted that Spain might be the next eurozone country to seek a rescue. Warning that "dark clouds" still hover over the global economy, she expressed confidence that International Monetary Fund members meeting this week in Washington would put up the funds needed for a "global firewall" - despite the United States not taking part.
"As part of the outcome of this meeting, we expect our firepower to be significantly increased," she said, hours after Poland and Switzerland declared their contributions to the $400 billion pool targeted to forestall any financial contagion from Europe. "You''ve got lots of clouds out there," she told journalists ahead of the annual IMF-World Bank spring meetings.
The eurozone remains "the epicenter of potential risks" she added. Worries that Spain might be the next country to seek an EU-IMF bailout, sparking new turmoil across the fragile eurozone, have filled markets over the past week. Lagarde also urged members to beef up the IMF''s fund for helping out the world''s poorest countries, on top of the crisis firewall.
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