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IMF push for $1 trillon rescue fund to cost UK £15bn

Posted by Ram Kumar Shrestha on January 18, 2012


Downing Street says Britain is ready to consider a request for extra funds from the International Monetary Fund, which is seeking to boost its firepower to around $1 trillion to safeguard the global economy.

Britain ready to consider IMF request for extra funds

A Downing Street spokeswoman said any increase in UK funding would have to be designed to assist struggling countries and not to bail out the euro. Photo: REUTERS
 The government made the comments just before the IMF confirmed reports that it wanted to expand its resources to protect ailing economies against any escalation of the eurozone debt crisis.

“Based on staff’s estimate of global potential financing needs of about $1 trillion in the coming years, the Fund would aim to raise up to $500bn in additional lending resources,” the IMF said in a statement.

Currently the IMF has resources of around $400bn. Britain is liable for 4.5pc of IMF funding, so a $500m increase in resources leaves the nation liable to provide an extra $22.5bn, or £15bn.

This could see Britain’s contribution rise beyond the £40bn maximum currently approved by Parliament – potentially provoking furious opposition among MPs.

A spokeswoman said that Chancellor George Osborne will put any “decent request” from the international financial body to Parliament for approval by MPs.

However, she stressed that any increase in UK funding would have to be designed to assist struggling countries and not to bail out the euro.

“The money from the IMF is to support countries, not currencies. This money is not a substitute for the eurozone providing resources to back up its own currency,” she said.

The IMF said the $500bn included the recent European commitment of about $200bn in increased resources.

However, it would add no further details, saying: “We are exploring options on funding and will have no further comment until the necessary consultations with the fund’s membership have been completed.”


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