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IMF pleads for more funding

Earlier this year, IMF members approved an $85bn increase in funds, but officials are saying recent events mean they need more. The organsation has already spent $32bn as part of rescue packages for South Korea and Indonesia in the past three months

However, Germany says there is no point in discussing the issue until Washington makes its position clear.

The German Finance Minister Theo Waigel, long an opponent of higher IMF quotas, says it makes no sense to talk about an IMF demand for an even bigger increase in resources.

"We have to wait (and see) what the Americans do, what the Senate and the House can do, and what the President is able to find and to do in the House," he said.

The IMF is asking member states to scrap a proposal for a 45% increase in its quotas and approve a bigger rise of 70, 75 or even 80%. Quotas, effectively a member state's subscription to the IMF, determine the level of IMF resources available to member states and a country's voting power.

Officials say a 45% quota rise would boost IMF resources by $50bn to £55bn.

Germany, the world's third largest economy, has a quota of 5.7%, which means it puts $11.2bn into the interest-earning pool of IMF reserves. The United States, the world's biggest economy has a quota of 18.3%, or $35.8bn.

Bonn officials are keen to maintain the IMF status quo, which gives a lot of votes to a handful of rich states.

The US administration, on the other hand, wants to increase IMF quotas. But its efforts may fail in Congress, where lawmakers have refused to approve new money for a separate IMF programme to cope with financial emergencies and where some say they will not approve a larger U.S. quota.

IMF officials, who asked not to be identified, have said that the IMF board would discuss the proposal for a bigger quota rise on Wednesday, a day before it decides whether to make a second payment on its $21bn loan to troubled South Korea.

The IMF has ruled out the idea of raising money on capital markets, which means extra cash can only be raised by increasing quotas.

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