Germany: Pakistan needs financial help within days

Pakistan is facing a balance-of-payments crisis and has just a few weeks to raise billions of dollars in foreign loans needed to meet debt payments and pay for imports.

Islamabad’s 7-month-old government, running Pakistan after more than eight years under former army chief Pervez Musharraf, has been reluctant to go to the IMF and has been looking for help from friendly governments.

But little assistance has materialized. Moody’s cut Pakistan’s credit rating by one level to B3 on Tuesday, while warning of further cuts.

German Foreign Minister Frank-Walter Steinmeier said after talks with Pakistani leaders in Islamabad on Tuesday that an agreement on help for Pakistan could not be delayed.

“I hope the decision will be taken soon. It won’t help to have it in six months, or six weeks. Rather, we need it in the coming six days,” Steinmeier said at a joint news conference

Steinmeier met Pakistani President Asif Ali Zardari and Foreign Minister Shah Mehmood Qureshi and said both had told him Pakistan would not be able to move ahead without IMF involvement. Donors caught up with their own problems brought on by the global financial crisis would apparently prefer to wait for IMF involvement, which would bring discipline by attaching conditions and targets, analysts say.

Pakistan has yet to formally ask the IMF for a facility but an IMF spokesman said on Friday talks going on in Dubai between the fund and Pakistani officials would enable the fund to respond swiftly should a request be made.

Steinmeier said Germany was ready to help.

“We will support your country in the negotiations with the IMF,” he said.

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