UK Turns Its Back On The Euro
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On Monday, eurozone ministers collectively agreed to the IMF’s firepower by 150 billion euros ($195 billion). But the target of 200 billion euros was not reached after Britain refused to provide additional resources to the IMF’s rescue fund.
As the European Central Bank struggles to garner support for its weak bond market, the IMF has in raising 150 billion euros to its crisis-fighting fund.
On Monday, eurozone ministers collectively agreed to the IMF’s firepower by 150 billion euros ($195 billion). But the target of 200 billion euros was not reached after Britain refused to provide additional resources to the IMF’s rescue fund.
As the European Central Bank struggles to garner support for its weak bond market, the IMF has in raising 150 billion euros to its crisis-fighting fund.
In a show of solidarity, EU finance ministers including several countries outside the eurozone, Denmark, Poland, Sweden and the Czech Republic, pledged their contributions to the IMF. The largest contributors were Germany and Spain.
The arrangement is designed to provide additional firepower for the IMF to fight the debt crisis in the euro zone. In a statement, the finance ministers said:
[quote]These resources will enhance the IMF’s capacity to fulfil its systemic responsibilities in support of its global membership, which is especially important given the ongoing economic slowdown and financial market tensions.[/quote]However, Britain declined support, insisting that IMF resources ought to be used in a broader sense for all G20 countries.
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[quote]The UK has always been willing to consider further resources for the IMF, but for its global role and as part of a global agreement, the office of the UK Treasury said in an emailed statement.[/quote]France has expressed optimism that Britain will contribute to the IMF fund.
“I have no doubt that the British – since a number of big G20 countries themselves will contribute to the IMF – will support the IMF,” French government spokeswoman Valerie Pecresse said.
“What the British don’t want is to specifically bail out the euro zone, which it doesn’t belong to, but if it’s about supporting the IMF and consolidating the IMF they will accept it,” she added.
In a strong use of words, the Telegraph lambasted what they saw as “being presented in treachery, Anglo-Saxon perfidy, and the naked pursuit of national self-interest.”
Referring to Britain’s refusal to commit, the Telegraph added:
[quote]As eurozone politicians never tire of reminding us, their aggregate debt levels are lower than those of the UK, US, or Japan. They are right. So get on with it and stop begging.[/quote]Related Story: Europe’s Currency Conundrum – What Can Save The Euro Now? : Joseph Stiglitz
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