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Britain skips contribution to the IMF for a Euro zone bailout fund

Wednesday, December 21st 2011 - 00:52 UTC
Full article 5 comments
German Finance Minister Wolfgang Schaeuble said any US contribution needs congressional approval German Finance Minister Wolfgang Schaeuble said any US contribution needs congressional approval

Britain’s refusal to contribute to the IMF for a Euro zone bailout fund has left the EU short of its 200 billion Euro target. The UK boycott leaves the Euro zone more reliant than ever on major economies such China and on Russia, which are willing to lend more to the IMF.

IMF resources are to be boosted to 150 billion Euros to ward off the debt crisis — with money from the Czech Republic, Denmark, Poland and Sweden.

The United States, meanwhile, has expressed concern about the IMF exposure to the Euro zone.

European Union finance ministers had set an informal deadline of Monday to arrive at the 200 billion Euros figure, which was agreed by EU leaders at a summit on December 8th and 9th and urged other nations to take part.

“Euro area member states will provide 150 billion Euros of additional resources through bilateral loans to the fund’s general resources account” the EU finance ministers said in a joint statement after a conference call on Monday to review progress.

While EU leaders agreed at their last summit on the desire to boost IMF resources, there are doubts about whether the scheme will work, with not just London and Washington unenthusiastic, but Germany’s Bundesbank too.

“Washington cannot make bilateral loans available to the IMF without Congress approving it” German Finance Minister Wolfgang Schaeuble told German radio. “There’s no chance of that and the US government has always made that clear.”

The increase in IMF resources is seen as one pillar in a multi-pronged strategy to strengthen the Euro zone’s fire-fighting capability and build better defenses for the future. Another pillar is making the Euro zone’s existing bailout fund, the EFSF, more flexible in how it tackles the debt debacle.

Categories: Economy, International.

Top Comments

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  • Redhoyt

    Putting the money in only to immediately take it out again smacks of clever accounting. Too clever. The UK wants no part, nor the US.

    The Euro is looking like a dead duck :-/

    Dec 21st, 2011 - 02:05 am 0
  • briton


    Dec 21st, 2011 - 02:25 am 0
  • Conqueror

    The euro and the EU need to be executed. Just think, the EU would have us importing Mercosur crap!

    Dec 21st, 2011 - 01:24 pm 0
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