The International Monetary Fund (IMF) has long been known as a source of economic stimulus throughout the world. For decades, the global investment group has used its resources to support struggling economies.
Yet a new report suggests that the IMF has its hands in over 40 countries at present, including several nations associated with the European Union and the eurozone. According to Zero Hedge, an independent finance blog, a variety of nations are involved in one of several IMF programs, including those that establish secondary credit lines or ones with a specific purpose, such as in the case of Greece and Portugal.
But Zero Hedge makes a noteworthy point in a recent post, when the author pointed out that the IMF's two biggest benefactors – the United States and Japan – are suffering from chronic budget issues that force them to borrow billions of dollars per year just to finance operations. The United States alone is responsible for 16.75 percent of the fund's financing, meaning that some of these resources could be borrowed themselves. Were the American government's ability to put forward IMF funding ever to be compromised, these operations could be threatened worldwide.
Despite the risks, the IMF has carried on with its mission of providing much-needed money when needed. Managing Director Christine Lagarde attacked the Obama administration over the weekend for failing to stop the so-called sequestration from occurring, arguing that these moves will slow global growth. Only time will tell if her predictions come true.
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