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March 2, 2012 / politicsbitesize

An update on IMF funding and the eurozone crisis

Los Cabos, Mexico

Back in January Politics:bitesize reported on a request by the IMF for £17.5bn from the UK government in order to reinforce funds for a further eurozone bailout. A discussion of this funding was on the agenda at the G20 summit in Los Cabos, Mexico, which took place this weekend (25-26 February 2012). A group of twenty ministers and central bank governors met to debate concerns about Europe’s sovereign debt crisis and the need for a $1.5trillion firewall fund to further stabilise the EU.

In her speech Angel Gurria, the head of the Organisation for Economic Cooperation and Development (OECD), stated that the $1.5trillion stabilising firewall fund would require at least half a trillion from the IMF. At present European nations have committed about a third of the amount needed if the firewall is to prevent any further crises.

The overall tone of the meeting was positive with regard to the eurozone crisis. Timothy Geithner, US Treasury Secretary, gave a nod of approval when he acknowledged the hard work of European leaders ‘in convincing the world that they are not going to allow a catastrophic financial failure’. One negative voice was heard during the summit and that was the UK’s Chancellor, George Osborne. In an interview with Sky News he said:

We are prepared to consider IMF resources but only once we see the colour of the eurozone money and we have not seen the colour of the eurozone money … Whilst this G20 conference, I think, has a lot of important things to discuss… I don’t think you’re going to see any additional IMF resources committed here because, quite frankly, the eurozone have not committed additional resources themselves.

Once again it seems the British government is not committing to helping out its closest neighbours and allies anytime soon. European leaders are to meet in March where an increase in their contribution to the firewall will be at the top of the agenda.

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One Comment

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  1. thurrockpress / Mar 2 2012 11:39 am

    Reblogged this on thurrockpress and commented:
    IMF Crisis

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