Europe gets new saviour in BRICS

Financially troubled Europe has a new saviour – the BRICS economies, including India, which have pledged to contribute $75 billion to rescue the debt-ridden economies of the continent. Prime minister Manmohan Singh on Tuesday offered to pitch in with $10 billion.

The five BRICS leaders – from Brazil, Russia, India, China and South Africa – at a meeting in the Mexican resort town of Los Cabos, felt that the euro zone crisis posed a grave danger to global economic and financial stability and there was need to resolve the crisis. They decided to enhance their contributions to the International Monetary Fund (IMF) to enable it to help the debt-ridden European nations.

Later, addressing the plenary session of the G-20 summit, Singh told the world leaders, ''The IMF has a critical supportive role to play in stabilising the euro zone. All members must help the Fund to play this role. I am happy to announce that India has decided to contribute $10 billion to the IMF's additional firewall of $430 billion.''

According to Singh, while many rich countries face difficulties, the less developed and developing countries are also facing serious problems because of the negative impact of the global crisis. ''Infrastructure investment in developing countries assumes special importance in this context,'' he said. ''It lays the foundation for rapid growth in the longer term, while providing an immediate stimulus for their economies and also for the global economy, by providing a robust source of demand.''

India, Russia and Brazil announced they would contribute $10 billion each for the IMF's $430 billion bail-out fund for Europe, while China agreed to chip in with $43 billion. South Africa, the smallest of the BRICS economies, will put in another $2 billion.

''This would promote adequate burden sharing amongst IMF creditors,'' a statement issued by the five leaders after their meeting said. ''These new contributions are being made in anticipation that all the reforms agreed upon in 2010 will be fully implemented in a timely manner, including a comprehensive reform of voting power and reform of quota shares.''