How the US subsidies Europe through the IMF

Normally, the US share of the IMF costs are 17 percent, though it is my impression that the cost share here will be significantly higher. In any case, 17 percent of 600 billion euros is (102 billion euros = $137 billion at the current exchange rate of $1.34 to 1 Euro).

The IMF is preparing a 600 billion euro bailout for Italy in case the debt crisis worsens, Italian daily La Stampa reported citing IMF officials (via AFP).

The IMF would guarantee rates of 4 or 5 percent on the loan, far better than borrowing costs far better than the commercial debt market where yields have reached as high as 8 percent. . . .

Something earlier:

As Greece teeters on the brink of defaulting on its government debt and Italy appears a strong contender to be the fourth European country in need of a financial bailout, the head of one of the key organizations in the attempt to financially rescue Europe signaled it will very likely need to increase its bailout fund—something that the U.S. has contributed more than $100 billion to already.

In a little-noticed, but very significant, development at the fall meeting of the International Monetary Fund (IMF) this weekend, IMF Managing Director Christine LaGarde distributed a document to the organization’s steering committee warning that it will need more than the $384 billion now in its financial war chest to deal with the uncertain financial situation in Europe. . . .