The 17-nation eurozone agreed yesterday to lend €150 billion to the International Monetary Fund for use in stabilising the euro currency area, a eurozone governmental source said.
“There is an agreement on a sum of €150 billion for the eurozone countries,” the source said.
The source said the aim was still to reach the €200 billion target set by EU leaders at a December 9 summit, despite a British refusal to stump up its roughly €30-billion share based on IMF quotas.
The other European Union countries “are to take up their positions,” the source said, but they had already “implicitly” agreed to reach the target designed to leverage a funding boost from other G20 states.
The source said the EU – all 27 of which took part in a three-and-a-half-hour conference call yesterday – “will reach the 200 billion (euros and are) ... progressing towards the 200 billion, that is clear.”
During the conference call, Britain’s finance minister George Osborne set down clear conditions for any eventual aid, a London government official said, adding that the British Treasury “will not contribute to anything that is only available to eurozone countries.”
The British government source added: “Nor will we participate in an increase in IMF resources that only comes from EU countries without the participation of other G20 countries” outside the EU.
The loss of the British share is a blow on two counts: it makes it difficult for the rest of the EU to reach a target being watched carefully by international credit rating agencies threatening eurozone downgrades; and it makes it harder to convince non-European G20 nations like the US, China or Russia to contribute themselves.
“As a longstanding supporter of the IMF, Britain stands ready to increase IMF resources alongside other countries around the world in order to help any country in distress,” the British government official said.
That was the position adopted by all participants at the last G20 summit in Cannes, but without US agreement on when – and Washington faces its own debt and budget crisis – there was little likelihood of a breakthrough.
“We will only provide more resources for the IMF if the eurozone (countries) do more to strengthen their firewall,” the British official said.