Britain rejects call to contribute to IMF eurozone rescue

19th December 2011, Comments 0 comments

Britain's finance minister George Osborne refused EU counterparts' pleas Monday for a 30-billion-euro ($39 billion) loan to the IMF for use in stabilising the eurozone.

With a conference call still ongoing just after 6:30 pm (1720 GMT), a London government official said Osborne articulated the position of the British Treasury, which was that "we will not contribute to anything that is only available to eurozone countries."

The source added: "Nor will we participate in an increase in IMF resources that only comes from EU countries without the participation of other G20 countries" outside the EU.

European Union finance ministers were racing to meet a self-imposed deadline to raise 200 billion euros ($260 billion) for new eurozone bailout funding set by leaders at a December 9 summit. The amount of the loans would be based on IMF quotas, based on relative size and wealth.

The loss of the British share is a blow on two counts: it makes it difficult for the rest of the EU to reach a target being watched carefully by international credit rating agencies threatening eurozone downgrades; and it makes it harder to convince non-European G20 nations like the United States, China or Russia to contribute themselves.

"As a longstanding supporter of the IMF, Britain stands ready to increase IMF resources alongside other countries around the world in order to help any country in distress," the British government official said.

That was the position adopted by all participants at the last G20 summit in Cannes, but without US agreement on when -- and Washington faces its own debt and budget crisis -- there was little likelihood of a breakthrough.

"We will only provide more resources for the IMF if the eurozone (countries) do more to strengthen their firewall," the British official said.

Britain has argued recently that the European Central Bank (ECB) should act as a US or British-style lender of last resort, standing behind a temporary rescue fund, the already stretched 440-billion-euro European Financial Stability Facility (EFSF).

© 2011 AFP

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