Feb 15/09. A "second wave" of
countries will fall victim to the economic crisis and face being bailed
out by the International Monetary Fund, its chief warned at the G7
summit in Rome.
The IMF managing director,
Dominique Strauss-Kahn's warning comes amid growing concern that at some
point in the next year a major economy could have to seek support from
the Fund. Mr Strauss-Kahn, who was yesterday attending the Group of
Seven leading finance ministers' meeting in Rome, said: "I expect a
second wave of countries to come knocking."
Strauss-Kahn also said the
rich world was now in the midst of a
"deep recession." It came as the G7 pledged to avoid slipping into
protectionism and repeating the same political and economic mistakes as
were made in the 1930s.
Some have speculated that the UK
may have to seek IMF support if capital markets become frightened of the
size of its foreign financial liabilities, which increasingly appear to
have become supported by the state. But there are a swathe of Eastern
European countries which appear particularly vulnerable and may need IMF
With the Fund's war-chest
expected to run dry later this year, the Japanese confirmed in Rome that
they would supply an extra $200bn of capital to the Washington-based