Eurozone crisis: Right to boost IMF funds, Cameron says

David Cameron and Nicolas Sarkozy in Cannes Mr Cameron is in Cannes with other G20 leaders

It is "right" to consider boosting funds to the International Monetary Fund at a time of crisis, the prime minister has told the BBC.

David Cameron, in Cannes for a meeting of the G20 industrialised nations, said there was "no risk" to UK taxpayers.

BBC political editor Nick Robinson says it could mean eurozone nations like Greece are indirectly helped by the UK.

Labour said IMF funds should not be used to plug a gap in the eurozone bailout fund.

The eurozone crisis featured in the House of Commons on Thursday with Treasury Minister Mark Hoban fielding questions from MPs.

When asked if the government had contingency plans for the euro breaking up, he replied: "Every good government would have plans in place for a whole range of eventualities and this government is well prepared for any eventuality."

'Very destabilising'

He was then asked if those contingency plans included any prospect of the UK adopting the euro. Mr Hoban replied: "I don't think that there's any intention for us to join the euro at a time when it's breaking up."

Later, Chief Secretary to the Treasury Danny Alexander called the collapse of the euro an "extremely unlikely" scenario.

Start Quote

The politics, here at home, are complex for a government pledged not to spend British taxpayers' money on propping up the euro ”

End Quote Nick Robinson BBC political editor

He told the BBC contingency measures were in place, although he would not go into details.

In Cannes, Mr Cameron told the BBC: "I'm here to support the British economy. When the world is in crisis, it is right to consider boosting the IMF."

He added: "No government lost money by lending money to the IMF. There is no risk to British taxpayers of seeing the IMF perform its proper role. That's what we have always supported."

His spokeswoman said the UK would not contribute "directly or indirectly" to the eurozone bail-out fund.

The UK currently provides £29bn ($46bn) of the IMF's £600bn ($950bn) lending capacity.

About £4.9bn of UK money is held in the IMF's fund but it can draw down up to £29.4bn from the Treasury in certain circumstances.

In a statement to MPs - sparked by an urgent question from Eurosceptic Conservative backbencher Peter Bone - Mr Hoban said that "at no point have we committed any British taxpayers' money, not to Greece, not to the bail-out fund".

He said there "may well be a case for further increasing the resources of the IMF to keep pace with the size of the global economy".

'Stop obfuscating'

But he added the government wanted to see an increase in the resources the IMF made available to all its members and not just those in the eurozone.

Start Quote

David Cameron and George Osborne should be clear about what's really going on”

End Quote Ed Balls Shadow chancellor

Asked how the government could guarantee that no extra UK money for the IMF would bail out the eurozone, Mr Hoban said all contributions go towards its "general resources" and of 53 IMF programmes worldwide at the moment, only three were in the eurozone.

Shadow chancellor Ed Balls said any additional funding should be held back until the details of the permanent eurozone bailout fund had been agreed.

"The IMF's job is to support individual countries with solvency crises, not to solve a structural problem caused by eurozone countries being unable to agree the necessary steps to support and maintain their monetary union," he said.

"So instead of obfuscating and hiding behind fudged words in communiques, David Cameron and George Osborne should be clear about what's really going on.

"They must clarify, as we have consistently said, that there should be no IMF funding to plug the gap in the bailout fund and do the job the [European Central Bank] should be doing."

Call for unity

As the G20 summit is taking place, Greek PM George Papandreou has faced calls for his resignation, amid opposition within his own party to his surprise referendum call on the EU bailout plan.

He said on Thursday he was ready to drop the plan and called for unity in his party ranks ahead of a confidence vote on Friday.

The Greek opposition New Democracy party has said it will accept taking part in a coalition government if Mr Papandreou agrees to stand down.

Nigel Farage, leader of the UK Independence Party, which campaigns for Britain's exit from the European Union, said: "For a few days there, the people of Britain were jealous of Greece - after all they were going to get a referendum.

"But of course now we can only feel empathy with them. They are in a similar boat. No referendum and a government that nobody ever voted for."


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  • rate this

    Comment number 252.

    233.nick powell
    greece should never have been allowed to join the euro, they have no indusry no major manufacturing to speak of

    Are you sure? They have an extensive tobacco industry.It helps to prune an aging population; keep countries' NHServices alive and gives Osborne a vast take in excise duty he wouldn't otherwise get.

  • rate this

    Comment number 251.

    Why do our idiotic politicians continue to act as though this country
    is the benefactor to the world???
    It's bad enough that the only department not to have it's budget cut
    is the one that gives out OUR money to countries that,for example,
    have enough money to build nuclear weapons and help the Taliban
    in Afganistan.
    My god,please let us have politicians with sense,not stupor!!

  • rate this

    Comment number 250.

    I wonder how many hundreds of thousands of letters directly to the Queen asking her to dissolve parliament it would take before she had a word in Cameron's ear and gently suggested that he seems to be representing no-one now - other than other corrupt or self serviing officials.

  • rate this

    Comment number 249.

    So more of our money going into the internetional pot instead of to repairing our infrastructure. May be if Cameron stopped paying the EU and then put that money to the IMF I would be more in favour.

    Where is our referendum???

  • rate this

    Comment number 248.

    244 by justinwpw - you clearly fail to understand the crisis?

    if the greeks default and revert to the drachma then god help the greeks because nobody else can!

    their 'finances' will be devalued by a minimum of 'four times' - they will be unable to trade in the markets - nobody will lend/buy/sell to greece!

  • rate this

    Comment number 247.

    Who is actually collecting all this so called 'debt' and who realistically is going to force a country to pay back money. I just don't get it, throwing around huge incomprehensible figures. The current model we have is daft and doesn't apply to the current globalist world we live in. We are all humans we all live on the same damn planet yet we insist on putting a price on everything !!.

  • rate this

    Comment number 246.

    At the next elections vote for the party UKIP that will take us out of the EU simples can't believe the amount of people moaning and (who voted for) about the so called three main parties who will never let us the people decide our future destiny.

  • rate this

    Comment number 245.

    Cameron - I am losing patience with you. Make up your mind.

    We do not have the money to go and bail out other nations. This applies especially to the EU. The EU gets what it deserves.

  • rate this

    Comment number 244.

    You have to ask, who elected the banks who run the financial system that now controls most of us, including the elected politicians? That is why we live in an age of financial fascism, where money is used for controlling countries and individuals. The Greeks will not be dictated to and are showing the world how to stand up to these bullying tactics!

  • rate this

    Comment number 243.

    Here they go again, saying one thing and doing another. If we're going to give money to the Greek bail out, let's at least do it above the table - the time might not be far off when we need help from the EU.

  • rate this

    Comment number 242.

    The conservatives get great satisfaction from telling us that they are having to make these cuts as labour said there was no money left. They must cut to the bone to reduce the deficit that they inherited from labour. Now it seems we have found billions down the back of the sofa to prop up struggling nations. It seems pleading poverty only applies to domestic policy.

  • rate this

    Comment number 241.

    Ref: 220. Aduphanel

    In my father's day we had a World War that engulfed the whole of Europe. And in my grandfathers' day we also had a World War that engulfed the whole of Europe. I think I know where I'd rather be.

  • rate this

    Comment number 240.

    Does anybody else find the term 'European Project' sinister? I feel like shouting 'I AM NOT A NUMBER' (older people might get that). However I fear that is exactly what I am. I dislike the EU and the World Gov that WILL follow it some time. We are already remote from our own gov, never mind EU -it will only get worse. At heart, this is about a political social experiment, not trade. Whats yr no?

  • rate this

    Comment number 239.

    232. Ron C
    The Greeks are notoriously known for their inability to collect taxes .... You and I are about to pay for all that Grandoise living,
    Absolute twaddle.
    The Greeks are taking an absolute hammering with the harshest austerity measures of anyone.
    In fact, most European average Joe's are suffering from austerity measures.
    Top execs, Bankers, tax avoiders etc are of course exempt.

  • rate this

    Comment number 238.

    @ Doctor Bob

    "The government points out that no country has ever lost money loaned to the IMF."

    Which bit of that didn't you understand?

  • rate this

    Comment number 237.

    So many Eu apologists saying we are not borrowing money to lend it to the IMF, it comes from this pot or that pot. Get this one straight, all the pots are empty. If, as one genius tells us, it is from out holdings of foreign currency that we have sloshing around, why don't we not have it sloshing around by paying off some of our debts with it bright spark.

  • rate this

    Comment number 236.

    Makes my blood boil - the suggestion of removing even more British tax money out of Britain

    We MUST have a REFERENDUM on this ridiculous ABUSE of our taxes. Q: Do we want to shell out £billions on fgn aid? Do we want to bloat the IMF to prop up europe?

    Come to think of it, our banks are exposed by a few billion. Let's see if we lose that first, eh? Taxes might yet have to go to our banks.

  • rate this

    Comment number 235.

    If SS Eurozone sinks we ALL sink - it's like saying “I’m OK because, it's not my end of the ship that's sinking, it's your end”.
    There's ONE ship, SS Europe - if it sinks we ALL go down.
    (Needless to add – it won’t)

  • rate this

    Comment number 234.

    I understand the argument about giving more money to help other countries during this time.
    However, if we have these reserves of money, why haven't we paid off some of our own debt? And if we don't have the reserves, are we borrowing more to finance this? Whose telling the biggest lies?

  • rate this

    Comment number 233.

    greece should never have been allowed to join the euro, they have no indusry no major manufacturing to speak of , all they have is some gorgeous beeches.


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