Japan Fin Min Sees No Quick G-20 Deal On IMF Funding

-- Japan doubts any G-20 deal on IMF funding in Mexico.
-- Finance Minister Jun Azumi says Japan and China think Europe still has room to make efforts to solve the crisis on its own.
-- Talks over additional IMF funding may not move much forward until after a planned euro-zone summit on March 1-2, sources say.

TOKYO -- Japan's finance minister signaled Tuesday that Group of 20 finance officials won't forge any deal at a planned meeting this weekend on how much money member nations should additionally provide for the International Monetary Fund to help it fight Europe's debt crisis.

Talks over the IMF funding aren't expected to make much progress until after a planned euro-zone summit on March 1-2, at which leaders of the 17-nation euro bloc are due to discuss an increase in the size of their EUR500 billion European Stability Mechanism, people familiar with the matter told Dow Jones Newswires.

Their remarks add to signs that non-European members of the IMF may not commit extra cash to the fund's euro-zone rescue until Europe clearly pledges to reinforce its firewall.

"As for the IMF, the way I see it, we are not yet at a stage where we are moving in the same direction and are about to decide specific amounts" that G-20 leading industrial and developing nations will offer the IMF, Azumi said at a news conference.

IMF chief Christine Lagarde is seeking to raise $600 billion to boost the fund's resources over $1 trillion as a backstop to Europe's own firewall. But Azumi said that the coming G-20 meeting of finance ministers and central bank heads in Mexico City on Saturday and Sunday will be a place to "examine progress in the European situation."

Major IMF stakeholders including the U.S., Japan and China share a sense that Europe's crisis must be fixed soon to save a global economy reeling from the crisis. Japan in particular has suggested from time to time its willingness to eventually lend more to the IMF. But all three have balked at quickly signing off on Lagarde's plan, saying wealthy European nations still have resources of their own that they should commit to crisis steps before asking for major IMF aid.

Whether and by how much euro-zone economies would raise the ESM's EUR500-billion cap will hold the key to future discussions over the IMF plan, the people familiar with the issue said.

Relevent countries "would probably work out details (on any IMF plan) after looking at the review of the (EUR500 billion) cap" on the ESM, one of the people said. "It is not possible that the IMF issue will be decided first."

The final shape of any IMF funding plan may not emerge until around the fund's semiannual meeting scheduled for April 20-22, they said.

Azumi added that Japan and China "share the view that there remains sufficient room (for Europe) to make efforts."

Azumi emphasized that Japan will consult with other nations, such as the U.S. and China, in determining investment amounts for the IMF. This suggests that no independent aid from Japan to the IMF may be forthcoming, as the U.S. Treasury has been encouraging other countries--including Japan--to hold off on adding money to the IMF as a way to prod Europe to cough up more of its own resources