David Cameron will resist any attempt by eurozone countries to press Britain to hand more cash to the International Monetary Fund to help fund a euro-bailout fund.
The IMF reported on Tuesday that eurozone countries at last week's EU summit had agreed in principle to raise €200bn (£168bn) for the IMF including €50bn from non-eurozone countries.
But the prime minister's spokesman said Cameron had made it clear he had not agreed to this proposal and it had not been approved by the IMF board.
Cameron said at the Cannes G20 summit he would be willing to put more money to the IMF, but indicated the additional contribution could not exceed the £40bn ceiling that has already been approved by MPs in a vote in the summer.
The UK has already committed a £30bn contribution, meaning the UK could not commit more than an extra £10bn without a further vote in parliament, something Cameron will want to avoid.
Any attempt to give the eurozone extra loans, even via the IMF, would be fiercely resisted by Tory Eurosceptics
The reference to €200bn fund was not made in the summit statement agreed last week but appeared in the official IMF magazine, Survey.
It said: "European leaders agreed to make bilateral loans to the IMF of as much as €200bn – with €150bn contributed by eurozone members and €50bnform other members of EU."
In the Commons, Cameron made no reference to specific sum, telling MPs: "Alongside non-European G20 countries we are ready to look positively at strengthening the IMF's capacity to help countries in difficulty across the world. But IMF resources are for countries, not currencies, and cannot be used specifically to support the euro."
The idea behind the IMF plan is to draw on the reserves of Europe's central banks.
The President of the German Bundesbank, Jens Weidmann, said his bank was willing to provide loans to the IMF so long as nations outside the euro-area also contribute.
He said the Bundesbank has stated its readiness to provide up to €45bn as long as there was a fair distribution of the burden among IMF members. If these conditions are not fulfilled, then we cannot agree to loan to the IMF.
He said it would be problematic if the US did not contribute.
There is a quiet satisfaction inside Downing Street that the agreement made by the EU countries is coming under closer scrutiny, and markets are starting to realise that it does not represent a major step forward.
The IMF reported on Tuesday that eurozone countries at last week's EU summit had agreed in principle to raise €200bn (£168bn) for the IMF including €50bn from non-eurozone countries.
But the prime minister's spokesman said Cameron had made it clear he had not agreed to this proposal and it had not been approved by the IMF board.
Cameron said at the Cannes G20 summit he would be willing to put more money to the IMF, but indicated the additional contribution could not exceed the £40bn ceiling that has already been approved by MPs in a vote in the summer.
The UK has already committed a £30bn contribution, meaning the UK could not commit more than an extra £10bn without a further vote in parliament, something Cameron will want to avoid.
Any attempt to give the eurozone extra loans, even via the IMF, would be fiercely resisted by Tory Eurosceptics
The reference to €200bn fund was not made in the summit statement agreed last week but appeared in the official IMF magazine, Survey.
It said: "European leaders agreed to make bilateral loans to the IMF of as much as €200bn – with €150bn contributed by eurozone members and €50bnform other members of EU."
In the Commons, Cameron made no reference to specific sum, telling MPs: "Alongside non-European G20 countries we are ready to look positively at strengthening the IMF's capacity to help countries in difficulty across the world. But IMF resources are for countries, not currencies, and cannot be used specifically to support the euro."
The idea behind the IMF plan is to draw on the reserves of Europe's central banks.
The President of the German Bundesbank, Jens Weidmann, said his bank was willing to provide loans to the IMF so long as nations outside the euro-area also contribute.
He said the Bundesbank has stated its readiness to provide up to €45bn as long as there was a fair distribution of the burden among IMF members. If these conditions are not fulfilled, then we cannot agree to loan to the IMF.
He said it would be problematic if the US did not contribute.
There is a quiet satisfaction inside Downing Street that the agreement made by the EU countries is coming under closer scrutiny, and markets are starting to realise that it does not represent a major step forward.
by Patrick Wintour taken from http://www.guardian.co.uk/business/2011/dec/14/uk-resists-calls-imf-bailout
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