Downing Street Says » International Monetary Fund and Europe

» Wednesday, December 14, 2011

International Monetary Fund and Europe

Asked if the UK would contribute to a Eurozone bailout through the International Monetary Fund (IMF), the Prime Minister’s Spokesman (PMS) said nothing had changed. He referred to what the Prime Minister said at the G20 press conference:

The G20 has made clear that it is willing to increase resources as necessary to provide a boost to global confidence. Alongside other countries, Britain stands ready to contribute to this effort within the limits that have already been agreed by Parliament. But let’s be clear: global action cannot be a substitute for concrete action by the Eurozone to stand behind their currency and by implementing what they’ve agreed.

Asked for reaction to the Czech Prime Minister’s comment that he would not contribute to any such Eurozone fund, the PMS said the Eurozone statement referred to additional resources to the IMF. Our position had not changed. The Prime Minister told the House after the G20:

It is for the Eurozone and the ECB to support the Euro and global action cannot be a substitute for concrete action by the Eurozone. The G20 withheld specific IMF commitments at this stage precisely because we wanted to see more concrete action from Eurozone countries to make their firewall credible and to stand behind their currency.

Asked if there had been any concrete progress since the G20, the PMS said there had been some progress and agreement on the medium term rules for the Eurozone, but they were still working on the implementation of that agreement. The Eurozone statement from last week talked about European countries providing resources to the IMF, but the UK had not made a commitment to do that. The PMS said there were some restrictions on what the IMF could and could not do. It could provide support for individual countries, but not currencies.
The PMS said that the IMF needed to be appropriately resourced: there was a great deal of uncertainty in the global economy and having a well resourced IMF was important for confidence.

Asked again if the Eurozone had taken concrete action, the PMS said the Prime Minister had set out the position in his statement to Parliament on Monday, when he said that putting in place new rules for the Eurozone was an important part of the answer; but the most pressing need was to fix the problems of the Euro. The Prime Minister told the House on Monday:

The markets want to be assured that the Eurozone firewall is big enough, that Europe’s banks are being adequately recapitalised and that the problems in countries like Greece have been properly dealt with.

Asked about what the Prime Minister thought about the French President calling the Prime Minister an obstinate kid obsessing about a single subject, the PMS said he had not seen those comments and so had not discussed them with the Prime Minister. The PMS said the UK’s focus was on pursuing our national interest at that summit. Part of that was to engage constructively to support an effective resolution to the Eurozone crisis, but it was also about making sure we had the necessary safeguards.

Asked if the Prime Minister would use that kind of language about another leader, the PMS said there was not a great deal we could add to that debate.

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