We will pretend to boost the bailout fund, and they'll pretend to believe us. This seems to be the hope of euro zone finance ministers trying to come up with a formula to boost the monetary union's rescue facility beyond its theoretical 500 billion euros.
The idea is to impress markets that Europe has a fund that could deal with a fiscal disaster in a large country like Spain. But enlarging the European Stability Mechanism (ESM) is also necessary to persuade the International Monetary Fund (IMF) to increase its resources for fighting a future euro zone crisis.
In that mostly political game, anything goes. Finance ministers are adding apples and oranges by mixing money already spent or pledged with funds that may never be used, and combining financial guarantees with hard cash. Given German bailout fatigue, the aim is to come up with the largest possible number that finance minister Wolfgang Schaeuble can take back to Berlin without risking the Bundestag's anger.
But euro zone negotiations have long been conducted in a glass house which everyone can clearly see through.
And the IMF could yet decide there's no reason it should pledge its money in advance if Europeans continue to be so stingy with theirs.
The real problem, though, was illustrated by the summit of the so-called BRICS countries earlier this week in Delhi. Brazil, Russia, India, China and South Africa asked for the 'urgent' implementation of a long-overdue reform of the governance of the IMF and World Bank that would increase the emerging countries' influence in these institutions. Without that, they threatened, there can be no increase in the IMF's resources.
The BRICS are impatient because Europe and the United States are jealously keeping their monopoly on the top jobs at both institutions. The old alliance allowed Christine Lagarde to become IMF chief last year, while Jim Yong Kim, Barack Obama's nominee, will soon become World Bank president.
Some kind of compromise may ultimately be struck. But euro zone governments should do more than play around with numbers if they want the IMF to play along.
