The International Monetary Fund (IMF) is considering taking part in the eurozone bailout fund but has not made a decision yet, reports Reuters.
"The IMF has indicated that they are considering it -- they have not taken a position," a eurozone official said. "It will all depend on the whole package."
In the words of John Carney of CNBC: “Translation: The US taxpayer may wind up funding the EFSF [European Financial Stability Facility] bailout fund.”
Analysts have been been buzzing about the size of IMF involvement in the eurozone bailout, but this is the first confirmation that the fund is actively thinking about playing an even bigger role than it is now, reports Business Insider.
Euro zone leaders are expected to approve a plan on Wednesday to increase the financial capabilities of the EFSF, a 440 billion euro bailout fund, without eurozone countries having to invest more capital into it.
"They have not agreed yet, but they have not ruled out this possibility. We have to define it better -- there would have to be a political agreement that this is something we would like to do and then we could talk with the IMF and the others," a second official told Reuters.
Well, how does this become the U.S. taxpayer's problem?
The reason this could be trouble for Americans is because the U.S. is the “largest source of funding for the IMF,” according to Carney. The U.S., by itself, contributes 17.72 percent of the IMF’s annual budget.
“It's not clear at this stage what role the IMF would play,” Carney writes. “Would it be partially funding the expansion? Or playing some kind of administrative role? The details will likely make all the difference to whether US politicians balk at using the IMF as part of the Eurozone bailout.”
A third source for Reuters said there were talks between the head of the IMF, Christine Lagarde, and European Union leaders about this technical option to raise money for the EFSF.
"An administrative account based at the IMF could be created easily since it will need only the IMF board approval to start, then it could act quickly and with little involvement of the IMF board provided it follows the guidelines given by the contributors," the third official said.
Hopefully, this "consideration" does not turn into a solid commitment by the IMF to become more involved.
(H/T Business Insider)