Reforms needed to bring eurozone crisis under control, chancellor warns Europe
George Osborne warned Europe that the boost to the financial firepower of the International Monetary Fund would not be enough to guarantee an end to the debt crisis that has bedevilled the eurozone.
As it became clear that it would be 2013 before Britain handed over its controversial £10bn share of the global fighting fund, the chancellor backed plans for closer integration of the eurozone through common euro bonds.
"Boosting IMF resources will not be enough on its own to secure the recovery," Osborne told the fund's key policymaking committee. "We also need a strong and co-ordinated global policy response if we are to exit the crisis."
The IMF was bracing itself for the judgment of the financial markets on the agreement to increase the size of its firewall by at least $430bn (£267bn). Doubts remained about whether the leading developing countries – Brazil in particular – would deliver on their pledge to increase the resources available to tackle a fresh outbreak of global turbulence.
The so-called Bric countries – Brazil, Russia, India and China – have privately agreed that they will only make a decision on how much to contribute when the G20 group of advanced and emerging economies meets in Mexico in June. Sources said the Brics wanted to see hard evidence that they would have a bigger say in the running of the IMF before making firm commitments.
UK sources said that Britain's £10bn would only become available once changes to the IMF's governance had been completed, and they did not expect this to happen until after the US presidential elections in November.
They added that there were sufficient resources available to the IMF in the event that the sovereign debt crisis intensified over the coming months.
Osborne said other rich countries should follow Britain's lead and implement credible plans.
Source: http://www.guardian.co.uk/business/2012/apr/21/george-osborne-imf-eurozone-crisis
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