IMF could double in size as G20 tries to build firewall
Published 04/11/2011 | 05:00
A DEAL being negotiated by world leaders at the G20 summit in Cannes could see the International Monetary Fund (IMF) double in size.
Britain is poised to provide billions of pounds for a new global economic rescue package, prompted by concerns that the EU plan to save the euro will not be enough to stabilise the world economy.
British Prime Minister David Cameron will face strong opposition from Conservative MPs over the potential use of taxpayers' money to assist European countries after repeated assurances from the government that Britain would not provide extra funds to help the eurozone.
Both the prime minister and George Osborne, the chancellor, insisted that the crisis is so grave that intervention is now required.
"When the world is in crisis, it is right that you consider boosting the IMF, an organisation founded by Britain in which we are a leading player," Mr Cameron said.
He added: "I'm here to safeguard the British economy. We have taken difficult decisions at home that have protected us from the worst of the debt crisis."
Asked why British money should be used to help rescue eurozone countries, Mr Osborne said that taxpayers from around the world, including those in America and China, would be "exposed" under the plan.
"Britain was there at the creation of the IMF," he said. "At a time of international economic instability it would be very strange for Britain to walk away from the IMF."
The chancellor added that G20 negotiations last night were "getting down to the nitty gritty of numbers". Under IMF rules, Britain would underwrite a portion of loans to struggling countries, but would only pay out if they defaulted.
The deal is expected to be agreed today. The eurozone has struggled to raise funds for its own rescue package. The announcement followed another chaotic day in Greece, where the government appeared on the brink of collapse.