Sunday 25 June 2017

Cameron says any extra boost to IMF from Britain should not be used to bail out euro

Andrew Woodcock

BRITISH Prime Minister David Cameron has made clear that any increase in UK funding to the International Monetary Fund would have to be designed to assist struggling countries and not to bail out the euro.

IMF officials believe that the organisation's existing $400bn lending capacity needs to be increased by around $500bn US dollars to protect the global economy from instability caused by the continuing crisis in the eurozone.

Britain is liable for 4.5pc of IMF funding, so an increase on this scale could take the UK's commitment beyond the £40bn currently approved by Parliament - potentially provoking furious opposition among MPs.

In a statement confirming that the IMF is preparing for an appeal for more funds, a spokesman today said: "Based on staff's estimate of global potential financing needs of about one trillion US dollars in the coming years, the Fund would aim to raise up to 500 billion US dollars in additional lending resources.

"This total includes the recent European commitment of about $200bn dollars in increased Fund resources.

"At this preliminary stage, we are exploring options on funding and will have no further comment until the necessary consultations with the Fund's membership have been completed."

Speaking at 10 Downing Street following talks with Italian Prime Minister Mario Monti, Mr Cameron said: "We are founder members and great supporters of the IMF. It's a key international institution.

"We set out our conditions at the Cannes G20 summit about expansion of the IMF. We believe the IMF must always lend to countries, not to currencies. We would only act if that was with others, not just as part of a eurozone measure.

"But above all, we want to see that the eurozone is standing behind its own currency.

"The case has to be looked at in that context, but we are founder members of the IMF and strong supporters of it."

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