George Osborne defends extra funding for IMFCurrent affairs
George Osborne defended his outrageous decision to loan an extra £10billion to the International Monetary Fund claiming the move to be necessary in stabilising the world’s economy.
The deal, which was made between the finance ministers and central bank governors, is expected to boost the IMF’s resources by $430billion (£267billion) in addition to the extra $60billion contribution from Japan, $15billion from South Korea, $10billion from Switzerland and $7billion from Australia.
In an interview with the BBC, Mr Osborne said Britain’s interest in the move would aid Britain in maintaining a stable economy whilst protecting the jobs in the nation.
He said: “Britain has a massive interest in a stable world economy and institutions like the IMF help ensure that stability – if you don’t have that, you lose jobs in Britain and the British economy suffers.”
The move, widely criticised by the Labourers and the Tories as being “wasteful”, is seen as a future investment by the Chancellor, reiterating the funding to be a “loan which comes with interest and gets paid back”.
The IMF Managing Director, Christine Lagarde, acknowledged the global funding as the international communities’ determination to stabilise the global finance.
The thankful Director commented on the unity stating: “This signals the strong resolve of the international community to secure global financial stability and put the world economic recovery on a sounder footing.
“These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members. They will be drawn only if they are needed, and if drawn, will be refunded with interest.”
The extra £10billion financial backing will leave Britain with a total liability of nearly £40billion to the IMF. Had the increase gone beyond the £10billion, it would have reached the minimum threshold required to introduce the House of Commons vote.
The Chancellor’s near escape from parliamentary scrutiny was criticised by Ed Balls, the Shadow Chancellor, declaring the former as “running scared”. He also argued that Mr Osborne should have rallied other countries to lend more to the IMF.
He 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.”
There is a real risk that yet another sticking plaster response will mean the eurozone continues to duck the tough decisions it needs to take.”