Introduction
The International Monetary Fund (IMF) is mainly known as the global association that provides financing to member countries which are either developing countries that are in extreme poverty or countries that are faced with severe economic crisis who are no longer able to seek financing from other sources. Along with these loans, training and technical assistance on bettering economic management is offered. The IMF also provides policy advice to governments and central banks based on analysis of economic trends and cross-country experiences as well as research, statistics, forecasts, and analysis based on tracking of global, regional, and individual economies and markets. (About the IMF, n.d.) Currently there are 188 member countries of the IMF which makes the organization extremely important to virtually the whole world. Upon its creation at the Bretton Woods Conference there were 29 member countries who signed the Articles of Agreement in 1945. Between its creation and present day the IMF has helped countries deal with economic crises, and funded growth for many poverty stricken countries. As the IMF has grown into a major global economic body the role of the IMF has shifted from its first purpose of ensuring currency exchange rate stabilization and overseeing of the international monetary system to a major global lending organization and global economic stabilization force. (About IMF, n.d.)

“Two years ago the world’s main international economic institution [the IMF] was heading for irrelevance, its homilies ignored by rich countries, its advice despised in poorer ones and its lending unnecessary in a world flush with private capital. Today the fund is widely hailed as a flexible and innovative crisis-responder.” (“Back from the Dead”, 2009)
As the economic crisis of the new millennium has become rampant across the globe the IMF’s importance in regaining stability has been recognized internationally as increasingly important.

Eurozone Economics
The Problem The current global economic tension that the world is under today is being influenced by the outcome of the Eurozone economic crisis. The Eurozone is dealing with a problem of sovereign debt overload and default, which is financing created by individual countries issuing government bonds in foreign currency. The countries that make up the Eurozone are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Republic of Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and Spain. The Eurozone countries share the Euro as their currency and the European Central Bank is in charge of managing the currency. Due to the nature of the relationship between the member countries of the Eurozone, the sharing of a currency and the fundamental imbalances of economic activity and planning, the choices made by individual sovereign governments greatly and directly affect other Eurozone countries. Mismanagement of fiscal policies and growing public and private indebtedness by certain countries has put massive pressure on other countries in the zone that are unable to properly influence those that are acting inappropriately. While the Eurozone is facing Economic failures there are many parts of the world that are in even more dire need of help, people starving and dying from disease, let alone jobless and facing austerity. Sub-Saharan Africa cumulatively has a debt of over 32 percent of GDP, and external debt of $300 billion USD. (World economic Outlook, 2012) The most poverty stricken people live on $1.25 a day while the middle incomes live on a slight increase of $2.00 a day. (World Bank, n.d.)

Unprepared Eurozone A contributing factor of the extended length and great impact of this Eurozone crisis is the fact that there was no pre-arranged agreement on such crisis procedures. As stated by Gilles de Margerie and Hubert de Vaulpine in the report Defective Default:
“The Eurozone’s problems have also demonstrated that the risk of sovereign default is real and not merely theoretical. Because of a general failure, pre-crisis, to contemplate the possibility of a default in the Eurozone, a satisfactory legal framework for sovereign debt on sovereign default has not been constructed, a consensus on accounting standards for assessing the value of risky debts has not emerged, and adequate rating methodologies which can be relied upon in unprecedented circumstances have not been devised.” Margerie and Vaulpine make an important point that contributes to the sheer magnitude of the Eurozone’s problems. There are no processes to deal with this sovereign debt problem and therefore the problem has spiraled out of control while member countries and relevant organizations scramble to find a solution and agree upon who is responsible for the clean-up and action on this problem.

Widespread Effects The most prevalent problem in the Eurozone is Greece, with an unemployment rate of 23.6% in Q2 of 2012 , and GDP growth of -7.3% in Q3 of 2012. (Hellenic Statistical Authority, 2012). The IMF, the European Commission and the European Central Bank are in negotiations over Greece’s situation and trying to forge a solution to the surmounting debt crisis. Creditors holding Greece debt will be hit by these restructuring efforts “Private Sector Involvement (PSI) in the Greek debt reduction plan, which means that private debtors will take a 53.5 per cent ‘haircut’ on the face value of their Greek sovereign bonds, as well as accepting lower interest rates.” (Rogers & Vasilopoulou, 2012). This is a huge reduction of value and clearly illustrates how serious the situation is affecting those outside of the country, and how important it will be for a global solution to occur. This is an important factor to grasp as this sort of action moves quickly and contagiously around the world because of a domino effect. No one is immune to economic downfalls no matter what part of the world or the economic status, because of the nature of our world now with the instantaneous transfer of information due to technological advances.
The Role of the IMF
Funding

While the IMF has been heavily involved in trying to resolve the crisis in the Eurozone, it is not the be-all end-all of solutions to the debt crisis. As Christine Lagarde, head of the IMF, stated at the World Economic Forum in January 2012, “The IMF is one of the tools but we need a toolkit (to address the problem) as it is at the moment unfolding”. The feeling given by this statement is that the problem has solutions and ways of being mended but not just one party will be able to produce the results needed. One big factor to the success of pulling the Eurozone out of trouble is funding and confidence in the organizations creating the solutions. Member states are the ones to invest in the IMF and fund the financial crisis relief programs; it has been increasingly difficult for the IMF to find enough funding for the Eurozone crisis. According to Willem Buiter and Ebrahim Rahbari of the Journal of Common Market Studies:
“It is possible that a global LoLR (Lender of Last Resort) like the IMF could have been an adequate source of ultimate liquidity for troubled Eurozone sovereigns. However, there was no consensus among the global political leadership on the extent to which the IMF should play this role. The United States and Canada, for instance, refused to make any financial contribution to the fund-raising efforts of the IMF since the middle of 2011 that were aimed at providing additional financial resources – beyond the US$380 billion of loanable funds remaining at the disposal of the IMF at the time of the IMF–World Bank Spring Meetings in April 2012. The US$430 billion finally pledged to the IMF fell well short of the US$600 billion Managing Director Lagarde had requested. It is also quite inadequate for the IMF, alone or jointly with the Eurozone fiscally backed facilities (the European Financial Stability Facility [EFSF] and/or the ESM), to act as a credible LoLR for the Eurozone. The ECB will still be needed to provide the true sovereign LoLR firepower; it is the only credible liquidity back-stop.” (Buiter & Rahbari, 2012) Lack of trust and belief in the Eurozone’s conviction to be committed to a solution has sprung from the fact that this developed zone of the world was not able to fund its own financing to deal with the debt crisis as a group of countries of the Eurozone. This general notion has led many other countries, especially emerging nations, which have gone through tough actions to regain economic stability, to be unmotivated to contribute to the IMF to support perceived lazy Eurozone members, as was highlighted by Buiter and Rahbari. However global involvement will become absolutely necessary in finding a solution to large economic crises such as that facing the Eurozone. The nature of the world today which is drastically different than that of periods prior to the 2000’s demands that all countries take the initiative and responsibility to finance and support the fund that can best deal with economic crises across the world. A great example of a country stepping up and taking the problem seriously was Japan who contributed $100 billion to the IMF to assist in the economic crisis that started in 2008. The actions of Japan, who had previously had a turbulent association with the IMF, signaled to other countries that this was a serious problem and that serious action and global responsibility was needed. (Holroyd & Momani, 2012). Japan’s actions signalled confidence in the IMF’s abilities, with the right funding, to impede advancement of the crisis.

Lack of Confidence and Disproportionate Interests While much funding and efforts are being poured into a region that is technically rich and developed the IMF realizes the importance of remembering all who need help. However there is criticism of the IMF as stated by Aaron Bloom, in his paper The Power of The Borrower: IMF Responsiveness to Emerging Market Economies:
“Not everyone is happy about the resurgence of the IMF. Critics believe the IMF is illegitimate because of the control developed members wield over the Fund. Developing and emerging market countries, who are the ones most impacted by the IMF’s policies, allegedly have little accountability from the IMF, and may be forced to accept onerous conditions imposed by developed countries acting in their own self-interest.” (Bloom, 2011) The IMF has a certain unrealistic aspect to its board of directors and governors as well as voting rights. The shareholders are not the same as those stakeholders who are directly affected by policies and procedures put in place by those shareholders that could be arguably less concerned with direct effects of feasibility on those who borrow. In other words those who make up the majority of the decision makers are not those borrowing from the IMF. As well countries that have been growing at rapid pace have not been readjusted in the quota subscription and voting and therefore have not contributed to their new level of world economic production or hold enough voting influence for their size. As Bloom illustrates;
“Additionally, the quota of a member state does not necessarily change as the member state’s economic size grows or shrinks. Any change in the initial or subsequent quota assigned to a country must be approved by 85 percent voting majority. The United States, with a 17.14 percent voting share, is capable of vetoing any increase in voting shares on its own. Countries that were wealthy when they entered the IMF thus have disproportionate voting power. For example, Japan and Germany each have over twice as many votes as China, and the Netherlands and Belgium each have nearly twice as many votes as Brazil.” (Bloom, 2011).

Quota Reforms The quota system of the IMF has three key aspects, it determines; the subscription amount the member has to pay in full upon joining the fund, the voting power the member receives which is a basic vote plus one for every one hundred thousand dollars of SDR funding provided, as well the quota amount provided to the IMF determines the members access to financing from the IMF in the future, up to 200 percent annually or 600 percent cumulatively of the quota. (About the IMF, n.d.). The 14th Quota reform package is in place to be effective January 2013. Ultimately the reform is to encourage more funding for the IMF and equality between undeveloped and developed countries, the quotas will have the following effects:
• Quotas will double from approximately SDR 238.4 billion to approximately SDR 476.8 billion, (about US$720 billion at current exchange rates).
• 6 percent or more of quota shares will shift from over-represented to under-represented member countries.
• 6 percent or more of quota shares will shift to dynamic emerging market and developing countries (EMDCs).
• Quota shares will be realigned. China will become the 3rd largest member country in the IMF, and there will be four EMDCs (Brazil, China, India, and Russia) among the 10 largest shareholders in the Fund, and
• Quota and voting share of the poorest member countries will be preserved. (About the IMF, n.d.)

All of these objectives of the 14th quota reform are aimed at boosting the confidence of the emerging market developing countries, and poor countries who could easily feel neglected for developed nation’s problems and influence in voting shares. Ensuring the confidence and accountability to these nations is imperative for the IMF to be able to create economic stability over the globe as the economies of the BRIC nations and other emerging markets flourish while the developed nations’ economies grow stagnant. The notion that borrowers as stakeholders should have more accountability over the IMF does not make complete sense as it is the shareholders as lenders that should be able to have governance over lending terms, policies and conditions to these stakeholders. If the shareholders of the IMF were given less power or influence over policies of lending then they would have fewer incentives for lending to the IMF in the first place. Just as with a corporation the shareholders get to vote on actions of the organization and it is not the stakeholders who decide. The IMF creates a more stable organization of itself with increasing a bit of equality through the 14th quota reforms without disregarding or discounting the importance of outside governance.
Conclusion

The IMF has a hard road ahead in the helping find and aid the solution to the Eurozone crisis. It needs to not only be able to provide financing to those affected countries that have nowhere else to receive financing from but also remain balanced in its efforts around the globe, as this economic crisis is not isolated to just on particular region. The IMF has done a good job of assessing its needs to cater to its members and implementing reforms to take care of these necessities to maintain confidence with its emerging market members. It realizes that the world is very interconnected and that disaster spreads quickly and rampantly in the economic world. The world’s economic powers are shifting and policies in place need to change with that fact and as implemented by Christine Lagarde reforms are changing for the better. Speed of implementation of economic crisis bail out agreements should remain as priority as the crisis grows exponentially and efforts today will require fewer efforts tomorrow.

References
About the IMF. (n.d.) Retrieved from http://www.imf.org/external/about.htm
BLOOM, A. (2011). The Power Of The Borrower: IMF Responsiveness To Emerging Market Economies.
New York University Journal Of. Retrieved from http://www.law.nyu.edu/ecm_dlv4/groups/public/@nyu_law_website__journals__journal_of_international_law_and_politics/documents/documents/ecm_pro_069751.pdf
Buiter, W. & Rahbari, E. (2012). The European central bank as lender of last resort for
Sovereigns in the Eurozone. Journal of Common Market Studies, 50, 9. Retrieved from http://onlinelibrary.wiley.com.ezproxy.okanagan.bc.ca/doi/10.1111/j.1468-5965.2012.02275.x/pdf de Margerie, Gilles & de Vauplane, Hubert (2012). A defective default: Keys to understanding the sovereign debt crisis. Law and Financial Markets Review 6.3, 171-175. Retrieved from http://search.informit.com.au/documentSummary;dn=488043025399784;res=IELBUS Hellenic Statistical Authority. (2012). Retrieved from http://www.statistics.gr/portal/page/portal/ESYE Holroyd, C. L. & Momani, B. (2012). Japan’s rescue of the IMF. Social Science Japan Journal. doi:10.1093/ssjj/jyr051 The International Monetary Fund: Back from the Dead. (2009, September 19). The Economist.

Rogers, C. & Vasilopoulou, S. (2012). Making Sense of Greek Austerity. The Political Quarterly,
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