David Cameron presses G20 to 'boost IMF'

 

British taxpayers could be asked to put more cash behind efforts to shore up confidence in the global economy, amid the continuing crisis in the eurozone, it was confirmed today.

Prime Minister David Cameron used the G20 summit in France to press for an increase in the resources available to the International Monetary Fund (IMF) to support ailing economies.

The summit opened against the backdrop of remarkable scenes in Athens, where Greek Prime Minister George Papandreou dramatically signalled he was ready to call off the referendum which is threatening to derail the eurozone bailout of his country's economy.

Updates from Greece were regularly reported to the meeting of heads of government and finance ministers of the Group of 20 leading economies in Cannes.

Some ministers were consulting their BlackBerrys during the talks to check on the latest reports from Athens, amid confusion over whether Mr Papandreou had resigned, cancelled the ballot or called for a national unity government.

Chancellor George Osborne said that eurozone leaders in the G20 - including France, Germany and Italy - had shown "a real sense of urgency" about resolving the sovereign debt crisis which has plagued the single currency area for two years.

Britain was maintaining pressure on the 17 eurozone states to implement the measures in the October 26 bailout package, including a 50% write-off of Greece's debt and an increase in the eurozone's bailout fund to a massive one trillion euro (£870 billion).

But Mr Cameron and Mr Osborne stood firm on their insistence that Britain would not contribute directly or indirectly to a eurozone bailout fund.

Sources said it was clear that "strong political pressure" was put on Mr Papandreou to sort out the obstacles to a bailout when he met French President Nicolas Sarkozy and German Chancellor Angela Merkel for eve-of-summit crisis talks.

And US President Barack Obama said it was vital to use the G20 meeting to nail down details of the rescue plan.

"The most important aspect of our task over the next few days is to resolve the financial crisis here in Europe," said Mr Obama.

He acknowledged that the EU had made "some important steps towards a comprehensive solution", but added: "Here at the G20 we are going to have to flesh out more of the details about how the plan will be fully and decisively implemented."

The decision of the European Central Bank's new head Mario Draghi to boost growth by cutting eurozone interest rates from 1.5% to 1.25% was welcomed in Cannes.

But doubts remained over whether cash-rich countries like China would be willing to contribute towards the bailout fund through a mooted special purpose vehicle.

It is thought Beijing may be happier to ramp up its backing for the general IMF resources for loans to countries which get into difficulties.

And Mr Cameron and Mr Osborne left little doubt that Britain was prepared to consider a hike in its commitment, which currently stands at around £29 billion - 4.5% of the total £600 billion available to the IMF.

Officials stressed that any increased IMF resources would be available to any state in financial difficulties around the world, not just to single currency members.

But there is certain to be political controversy in the UK if the first states to make a claim on the money are beleaguered eurozone nations like Italy or Spain.

Mr Cameron said: "Let's be clear, when the world is in crisis, it's right that you consider boosting the IMF - an organisation founded by Britain, in which we're a leading player.

"No government ever lost money by lending money to the IMF, which supports countries right around the world.

"What we wouldn't support is the IMF investing directly in some euro bailout fund. That wouldn't be right and we won't back it.

"There is no risk to the British taxpayer of seeing the IMF play its proper role. That's what we've always supported."

Officials stressed that no figure had yet been proposed for an enhanced IMF fund or any potential increase in the UK contribution. No changes in the quotas contributed by different IMF shareholders are envisaged.

Mr Osborne said discussions on IMF funding were not expected to conclude before tomorrow, and aides suggested that decisions on precise figures may not be reached before the G20 breaks up on Friday afternoon.

The Chancellor said there was "a general willingness around the table to contemplate and consider an increase in IMF resourcing".

The UK has always been a supporter of the IMF and said it would be "strange" if it "walked away" from the international financial body at a time of global crisis, he said.

The Chancellor denied the proposal was a panic response to the risk of collapse in last week's eurozone deal, insisting it had been discussed at the IMF's annual meeting in Washington last month.

He regards standing behind the IMF as an extremely low-risk option, as the body is a "senior creditor" whose loans are always first in the queue to be repaid.

Britain's exposure to the IMF does not increase the national debt or deficit, as the funds are treated as part of the UK's foreign currency reserves.

PA

Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
News
Waitrose will be bringing in more manned tills
newsOverheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
News
Russia's President Vladimir Putin gives his annual televised question-and-answer session
peopleBizarre TV claim
News
The energy drink MosKa was banned for containing a heavy dose of the popular erectile dysfunction Levitra
news
VIDEO
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
Sport
Australia's Dylan Tombides competes for the ball with Adal Matar of Kuwait during the AFC U-22 Championship Group C match in January
sportDylan Tombides was diagnosed with testicular cancer in 2011
Arts & Entertainment
Martin Freeman as Lester Nygaard in the TV adaptation of 'Fargo'
tv
News
Posted at the end of March, this tweeted photo was a week off the end of their Broadway shows
people
Arts & Entertainment
tvIt might all be getting a bit much, but this is still the some of the finest TV ever made, says Grace Dent
Arts & Entertainment
Comedian Lenny Henry is calling for more regulation to support ethnic actors on TV
tvActor and comedian leads campaign against 'lack of diversity' in British television
News
peopleStar to remain in hospital for up to 27 days to get over allergic reaction
Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Life & Style
life
Life & Style
fashion
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Apprentice IT Technician

£150.00 per week: QA Apprenticeships: This company is a company that specializ...

1st Line Technical Service Desk Analyst IT Apprentice

£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Sales Associate Apprentice

£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit