[stop-imf] German calls for smaller IMF

[Robert Weissman]

Growing momentum for the shrink the IMF movement:

[B] BBK's Stark says IMF should only provide short-term liquidity
By Bridge News

Frankfurt--Mar 14--Bundesbank Vice President Juergen Stark said the
International Monetary Fund should be given a "clear mandate" by
restricting the organization's responsibilities in the area of balance
of payments aid to providing short-term liquidity. The World Bank
should focus on providing financing for individual projects and
sectoral loans, he said. Stark's comments follow the nomination Monday
of Horst Koehler as Europe's IMF head candidate.

* * *

"The IMF should no longer extend long-term structural loans and the
world bank should no longer participate in crisis packages. Fighting
poverty is a development goal and therefore comes within the World
Bank's authority," Stark said.

The IMF, by contributing to monetary stability, was also making a
contribution to fighting poverty, Stark said.

Stark also repeated the Bundesbank's traditional theme that large
international aid packages are harmful in the long run as they promote "
moral hazards" and lead to less-than optimal allocation of resources.

The inclusion of the private sector in crisis prevention could best be
achieved by establishing quantitative limits to the IMF's lending
volume, Stark said. End

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