After clutching his cards close to his chest for weeks, George Osborne showed his hand yesterday. What the Chancellor revealed was a $15bn (£10bn) cheque for the International Monetary Fund.
Mr Osborne, attending the spring meeting of the IMF and the World Bank in Washington DC, said the decision to bolster the resources of the lender of last resort for distressed economies was firmly in Britain's national interests.
"Jobs and growth in Britain depend on stable world economy," he said. "That needs a strong IMF. The UK sees itself as part of the solution to the global debt crisis rather than adding to it."
But he was quick to point out that the extra £10bn in loans, which will be drawn from Britain's currency reserves, would not require a vote of approval in Parliament. MPs voted last July to raise the UK's commitment to the IMF up to a ceiling of £40bn. Only £30bn has been drawn down so far, enabling Mr Osborne to avoid a fresh vote for his new £10bn pledge. Last year, 32 Conservatives voted against the increase.
Yesterday, the Chancellor was at pains to stress that the new funds were not specifically earmarked to assist the eurozone, although Spain and Italy are widely known as the two economies most likely to need an IMF bailout soon.
Eurosceptic Tory backbenchers, who oppose any additional UK contributions to the IMF that could end up being used to support single currency nations, were restive last night. Peter Bone described the decision as "bonkers".
Labour was also critical, saying European governments had not yet done enough to help themselves. The shadow Chancellor, Ed Balls, said: "It is disappointing that the Chancellor has not taken the opportunity to press the wealthy eurozone countries to dig into their own pockets and establish a strong firewall of their own, before offering up more funding from Britain."
Mr Osborne said Britain would earn interest on its increased loan commitments and pointed out that no country had ever lost money lending to the IMF. The fund is a preferred creditor whenever it bails out countries, meaning it must be repaid before anyone else.
The UK pledge coincided with new commitments to the IMF from Australia ($7bn), Singapore ($4bn) and South Korea ($15bn). In total the IMF director, Christine Lagarde, managed to raise the Fund's lending resources by $430bn.
Earlier this week, Japan pledged $60bn. Sweden has committed $10bn, Poland $8bn, Switzerland $26bn and Denmark $7bn. Eurozone countries promised $200bn. But the IMF's largest shareholder, the US, has refused to offer more this time.Reuse content