George Osborne in IMF hint after eurozone deal

George Osborne hinted today that Britain could contribute more to the IMF after a rescue package was agreed for the eurozone.

But the Chancellor sought to reassure Tory backbenchers that UK money would not be earmarked to bail out the struggling single currency area.



Markets around the world have surged after hours of tense negotiation in Brussels finally produced a deal designed to cool the crisis.



Banks have agreed to take a 50% write-off on their Greek debt holdings, and the European Financial Stability Facility (EFSF) is to be leveraged to 1 trillion euro (£880 billion).



Billions will also be pumped into vulnerable banks to protect them from failure.



The measures did not go as far as many financial experts had been demanding over recent months.



But updating MPs on the developments, Mr Osborne said the eurozone now appeared to be on the "right road".



"Our view is that last night very good progress has been made towards solving the immediate crisis, very good progress on all fronts," he said.



"But much detail remains unresolved and having put pressure on the eurozone to get this far, we have to keep up the pressure to get the details completed.



"They have started down the right road and now they have to finish the job."



He insisted that Britain will not contribute money to the EFSF bailout fund - but did concede that extra money could go to the IMF.



"Supporting countries that cannot support themselves is what the IMF exists to do and there may well be a case for further increasing the resources of the IMF to keep pace with the size of the global economy," he said.



"Britain, as a founding and permanent member of its governing board, stands ready to consider the case for further resources and contribute with other countries if necessary."



But he stressed: "We are only prepared to see an increase in the resources that the IMF makes available to all countries of the world. We would not be prepared to see IMF resources reserved only for use by the eurozone."



Speaking en route to a Commonwealth meeting in Australia, David Cameron also welcomed the deal.



"Last night they put in place the key elements needed to tackle the urgent crisis in the eurozone: strengthening the banks; building a firewall; dealing more comprehensively with Greek debts," he said.



"They made very good progress. They need to keep up the momentum and work urgently to fill in the remaining detail."



However, Tory backbenchers are already signalling their willingness to oppose any effort to boost Britain's contribution to the IMF.



Basildon MP John Baron and Amber Valley MP Nigel Mills were among those who challenged Mr Osborne on the issue in the Commons.



Mr Mills expressed concern that "the IMF does not end up supporting a currency if a country chooses not to take the right action".



Outside the chamber, Shipley MP Philip Davies accused Mr Osborne of "dancing on the head of a pin" by suggesting funds given to the international body would not end up bolstering eurozone countries.



"The last drop of goodwill has been used up for bailing out countries in the eurozone through one mechanism or another," he said.



"There is no point trying to bamboozle us with methods. It is not acceptable to bail it out through the back door."



Mr Davies repeated his threat that a rebellion over IMF funding could make this week's damaging EU referendum revolt look like a "child's tea party".



"They have used up the last drops of goodwill," he added.



Under the terms of the Brussels deal, European banks will have to increase cash buffers designed to protect against future crises - known as Tier 1 capital ratios - to 9% until next June.



Banks will be expected to try first to use private sources of capital to raise the 108 billion euro (£94 billion) needed to beef up these protective cushions but the state will step in if this is not possible.



EU leaders said they would finalise Greece's second bailout package by the end of the year, which will include a higher private sector involvement.



The private sector - predominantly financial institutions such as banks - has been asked to write off 50% of its Greek debt.



The eurozone will contribute an additional 100 billion euro bailout to this write-down in a move to lower Greek debt to 120% of GDP by 2020.



The FTSE 100 closed 3% higher as investors drew confidence from the political agreement - even though many had been calling for more debt to be written off and a larger bailout fund.



In France, the CAC index rose more than 6%, while the Dax in Germany increased by more than 5%.



Banks led the rally, with Barclays and Royal Bank of Scotland rising 18% and 10% respectively.



The euro also strengthened against both the dollar and the pound.

PA

News
The Banksy image in Folkestone before it was vandalised
people
Life and Style
tech

Sales of the tablet are set to fall again, say analysts

Sport
football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
i100
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
News
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
News
Brian Harvey turned up at Downing Street today demanding to speak to the Prime Minister
news

Met Police confirm there was a 'minor disturbance' and that no-one was arrested

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010
films

George Lucas criticises the major Hollywood film studios

Voices
Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'
voices

Does Chris Grayling realise what a vague concept he is dealing with?

Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Life and Style
The charity Sands reports that 11 babies are stillborn everyday in the UK
lifeEleven babies are stillborn every day in the UK, yet no one speaks about this silent tragedy
News
Blackpool is expected to become one of the first places to introduce the Government’s controversial new Public Space Protection Orders (PSPOs)
news

Parties threaten resort's image as a family destination

Life and Style
Northern soul mecca the Wigan Casino
fashionGone are the punks, casuals, new romantics, ravers, skaters, crusties. Now all kids look the same
Life and Style
gaming

I Am Bread could actually be a challenging and nuanced title

News
Nigel Farage has backed DJ Mike Read's new Ukip song
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Year 5 Teacher

£80 - £140 per day: Randstad Education Leeds: Year 5 Teacher KS2 teaching job...

Software Developer

£35000 - £45000 Per Annum Pensions Scheme After 6 Months: Clearwater People So...

Systems Analyst / Business Analyst - Central London

£35000 - £37000 per annum + Benefits: Ashdown Group: Systems Analyst / Busines...

Senior Change Engineer (Network, Cisco, Juniper) £30k

£30000 - £35000 per annum + Benefits: Ampersand Consulting LLP: Senior Change ...

Day In a Page

Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album
Hugh Bonneville & Peter James: 'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'

How We Met: Hugh Bonneville & Peter James

'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'
Bill Granger recipes: Our chef's heavenly crab dishes don't need hours of preparation

Bill Granger's heavenly crab recipes

Scared off by the strain of shelling a crab? Let a fishmonger do the hard work so you can focus on getting the flavours right
Radamel Falcao: How faith and love drive the Colombian to glory

Radamel Falcao: How faith and love drive the Colombian to glory

After a remarkable conversion from reckless defender to prolific striker, Monaco's ace says he wants to make his loan deal at Old Trafford permanent
Terry Venables: Premier League managers must not be allowed to dictate who plays and who does not play for England

Terry Venables column

Premier League managers must not be allowed to dictate who plays and who does not play for England
The Inside Word: Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past

Michael Calvin's Inside Word

Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past