WASHINGTON -- An infusion of $430 billion will give the International Monetary Fund a badly needed boost to tackle Europe's prolonged debt crisis, but global finance officials sent a strong message Saturday that struggling governments must speed reforms or risk spooking jittery markets and raising the economic danger.
After receiving billions of dollars in pledges from individual countries, nearly doubling the lending agency's reserves available for loans to almost $1 trillion, the IMF said in a statement following its weekend meetings that financially strapped European countries must put in place bold changes to resolve their debt problems.
"It is nice to have a big umbrella," Managing Director Christine Lagarde said at a news conference. She and other officials said the new money should reassure financial markets troubled recently by the prospect that Spain could be the next country to seek emergency loans to escape a default.
The 188-nation IMF, working with European governments, has provided rescue programs already for Greece, Portugal and Ireland. Spain, however, is a much bigger economy and would require much more financial assistance were it unable to sell its government debt to private investors.
Europe's problems dominated the discussions of finance officials who assembled in Washington for the spring meetings of the IMF and the World Bank. Those gatherings were preceded by talks among the Group of 20 major economic powers; the G-20 includes traditional economic powers such as the United States and Germany and developing nations including China and Brazil.
The meetings concluded Saturday with a final statement from the committee that sets policy for the World Bank.
"Policy adjustments and improved economic activity have reduced the threat of a sharp global slowdown," the committee said. But the panel said poor countries still faced challenges and remained in need of programs to reduce poverty and promote economic reforms.
Treasury Secretary Timothy Geithner told the panel that Europe needs to be more creative and aggressive in fighting its debt crisis, using all the resources at its disposal, including the European Central Bank, the lender for the 17 nations using the common euro currency.