AP answers your questions on the news, from IMF loan money to vacuuming up spilled oilBy AP
Friday, June 4, 2010
Ask AP: IMF money, vacuuming up spilled oil
What ever happened to that vacuum system — promoted by Kevin Costner — that might be able to collect oil from the Gulf of Mexico?
Curiosity about how the testing of the system is going inspired one of the questions in this edition of “Ask AP,” a weekly Q&A column where AP journalists respond to readers’ questions about the news.
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I’ve recently read that the International Monetary Fund is bailing out Greece. Where does the IMF get its loan money, and is any of it from American taxpayers?
The International Monetary Fund gets the bulk of its loan money from its member countries. It operates essentially like a global credit union — member countries pay into the IMF when they join, and the IMF taps those resources supplied by the 186 countries when it needs to provide loans to a country facing economic difficulties.
When a country joins the IMF it is assessed a “quota” that is broadly based on its relative size in the world economy. A country normally pays one-fourth of that quota in the form of a widely accepted foreign currency such as the U.S. dollar, the Japanese yen or the British pound. The remaining three-quarters of its quota can be paid in the country’s own currency.
It is primarily from these quotas that the IMF gets the resources to make loans to countries in trouble, although it can also tap other resources, such as special borrowing arrangements it maintains with wealthy nations, including the United States.
The U.S., as the world’s largest economy, is the biggest contributor to the IMF with a quota of 17.09 percent. That support totals around $54.8 billion at the current exchange rate for the dollar. That is the size of the contribution the United States has made to the IMF that the agency can draw upon to support its various loan programs.
The second-largest contribution comes from Japan, the world’s second largest economy, with a quota of 6.12 percent.
The quota percentage roughly represents the size of the contribution the U.S. makes to various IMF programs, including the IMF’s emergency loans such as the one to Greece.
The IMF’s three-year loan to Greece totals 30 billion euros, roughly $39 billion. It is part of a total support package for Greece of 110 billion euros or about $145 billion. The biggest part of the support is being provided by the 15 other nations that, along with Greece, share the euro currency.
AP Economics Writer
Has BP tested Kevin Costner’s vacuum system yet and what was the outcome? I haven’t seen anything on it for a couple of weeks and BP was going to test it a couple of weeks ago.
BP agreed last month to test devices promoted by Kevin Costner that essentially would vacuum up the oil.
Costner’s company, Ocean Therapy Solutions, has been testing the machines onshore using samples provided by BP, according to CEO John Houghtaling. In recent days, the company has been outfitting the machines to prepare them to handle the deep waters of the Gulf.
Testing of the equipment on the water is expected to begin Friday.
Costner has invested more than $24 million to develop centrifuge devices designed to clean water polluted by oil. Houghtaling, his business partner, says the devices are capable of cleaning up to 200 gallons of water per minute, or 210,000 gallons per day, by separating the oil and storing it in tanks.
Associated Press Writer
The media is reporting the EPA is going to levy a fine on BP each day until the Gulf oil spill is corrected. Fines like this are not new, so where does the money acquired from these penalties go? And how much did the EPA collect in penalties last year, or the latest year the information is available?
The Environmental Protection Agency has not yet fined BP for the Gulf oil spill — details of possible penalties will be worked out later. The fine will likely be in the hundreds of millions of dollars, and may be much more, depending on how much oil ends up being spilled.
If there is a fine, the money will go into the U.S. Treasury, the general pot of money used to run the federal government.
The most recent figure the EPA has for collected fines comes from the 2009 fiscal year, which ended Sept. 30, 2009. During that year, $90.1 million in civil penalties were collected.
Associated Press Writer
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Tags: Accidents, Ask-ap, Environmental Concerns, Europe, Greece, Journalism, North America, Oil spill, United States, Western Europe