Lagarde Urges Britain To Boost IMF Funds
Christine Lagarde has issued a personal appeal to George Osborne to provide extra funds for the International Monetary Fund.
The Fund's managing director, who warned that there were "dark clouds on the horizon" for the world economy, said "it is in their interests" that Britain provides extra bail-out cash.
In an interview with Sky News, she said that she had now raised $320bn of the $400bn extra resources she wants to bolster the Fund by, but added: "We have more [funds] in the pipeline. They will be announced in the coming days and I hope that by the end of the spring meeting that we have reached critical mass."
She added that it was "in [Britain's] interests" to provide more resources for the fund.
"The UK is a founding father of the IMF. John Maynard Keynes was one of the two patrons. And the UK is there for international grave situations," she said.
"It's always been there. It's always been a very loyal partner when it's tough. But it's in their interest - because if the key partners of a country like the UK are in very bad shape they are bad clients. They can't pay their bills. They can't trade properly. And it's not in the interest of the UK to have a weak euro."
While many expect George Osborne to pledge extra money to the fund this week, Britain is still one of the few remaining hold-outs for the new money-raising round - the proceeds of which may be used in future euro bailouts.
The last time Mr Osborne went to Parliament to raise fresh IMF bailout funds, it triggered a Conservative backbench revolt.
Should the UK have to provide more than a further £10bn, the Chancellor would have to return to Parliament for permission.
Mme Lagarde said that she wanted the euro bailout funds to be able to channel money directly to troubled Spanish banks, rather than doing it indirectly through the country's government.
She said: "Spain is dealing with its issues. We wish it [recapitalisation] could happen more directly between the European pool of money rather than have to be channelled through the sovereign."
The comments come amid growing worries that the country, which is facing borrowing costs of over 6%, may need a bailout.
The fund has never lost its members' money in its previous bailouts, but given the scale of the current sovereign debt crisis, some economists suspect this could happen to it for the first time.
She refused to rule out the possibility of this occurring this time around, but added: "Our job is to look at risks. So when we put in place a programme we also look at mitigating the risks. And we don't like to have a huge concentration of risks..."
She continued: "Clearly the eurozone is a centre of concentrated risk which is why it justifies fully the burden sharing approach that we've had and that we'll continue to insist on having and the risk mitigation policy that I've just mentioned."
Asked whether she would consider resigning if the IMF were to lose money, she said: "Well that's an interesting proposition. I tell you something - we never leave the table of negotiations with our members and I would be the last one to leave the table.
"The captain of the ship has to stay on board until the last moment - and I'm not suggesting our boat is in bad shape. It's in pretty good shape actually, and I'm determined to do the job, thank you."
what do you think?
Tell them to get lost. we need all the money that we have left!!!
Osborne needs to tell the IMF that this cash cow has run dry.
They talk about 'billions' as if they are poppy seeds and not peoples hard earned money! Do these people even appreciate how hard it is to just earn a living?
Ronald George Halliday
instead of pleading for more money, tell there cronies to stop partying and realise that there antics are breaking the world apart, and find ways to create employment, then maybe ask for a handout.
I'm afraid it is time to say NO!! Since the EU was formed the UK has been one of the largest net contributors, yet we are one of the smallest beneficiaries. Countries like Ireland, Portugal and Spain have received billions since the formation of the EU yet their economies are in tatters. Why should we give the IMF more? Take a look at who owns the major infrastructure in this country (gas, electricity, water etc). Europe, America and the rest of the world already own large sections of this country, and what the Europeans and Americans can't buy the Chinese are now taking. China has a sovereign/slush fund of over $3 trillion, which they are using to buy key industries around the world. Why doesn't the IMF strike a bargain with the Chinese and ask them for the money?! People talk about the arrogance of the British, tell us to move on and stop thinking we're more important than we are, but when times are hard they try to flatter us by telling us how great we still are, and how we helped to set-up the IMF. Those days are gone, and the wallet is empty!!!!
Poor George, yet again, he finds himself (and us by default) reaching for his ankles as LaGarde puts her harness on and moves the vaseline out of reach!
Yes it is in our interest to see other countries waste our money faster than we can. IMF go for a long walk off a short plank. The IMF know the euro is doomed. Why waste anymore propping up countries that would be better off out of the useless euro, or the EU.
tell them to get lost. they are welcome back when they learn not to waste our money.but i doubt the government has the balls to do that and will roll over while they tickle their bellies whilst giving them our money.
I say this: We agree to offer the ... excuse me a second, please ... scroll ... International Monetary Fund a "blank cheque" for any amount of trillions of pounds we can afford. The only requirement we ask for in return is ... errr? ... Aha! Total control of the International Monetary Fund with its headquarters relocated to London and a similar blank cheque of our money paid back at 10% interest per year for the foreseeable future for Great Britain. Foreseeable future can be described as up to and including 3,000 AD.
David Rhys Price
More money to save a sinking ship. I don't think so
Ok who is next on the list? Spain. Then Italy. Why should we bail out a currency we are not part of? (thank heavens!). Anyone with any economic sense can see the euro is failing spectacularly. The pieces are slowly falling off. What I fear more than anything in Europe is an upsurge in political extremism as desperate people feel they have no where to turn. The Greek elections could be interesting.
I think that you are right, Tim. Germany's economic problems in the 1920s gave the world Hitler, so what will happen next?
The answer to this is get lost we didnt start the IMF and we dont have the euro here, dont bail them out, we pay enough taxes now. this country is in enough dept we dont need to be draged down with the EU trying to bale them out because they cant and wont restrain themselves. Make the Mr & Mrs rich in those countries go down a peg or two and lose some of their wealth instead of shoring them up and getting richer and the poorer getting poorer
It's a shame the critics of this don't understand that this would be a loan through the IMF, on which we would receive interest. To my knowledge no country has givenmoney to the IMF that haven't been returned with interest. So the IMF want us to do what almost all other rich countries are doing, lend money that will be repaid with interest, on terms that the IMF will impose to ensure the recipient country takes the appropriate action for economic recovery. The result will be beneficial for the country, the global economy, and the UK. But the little Englanders don't understand any of that.
Garry, we understand all too well, but the Greeks have failed to fully implement the EU's rules, so will the IMF do any better? As for being a rich country, I think that is now doubtful. We are heavily indebted.
well i 'll be damned ...................I agree with you on this one Grant !!
Most definetly no!! Any contribution will just get wasted. Spain must start living in the Real world. The problem is that there are many counties queuing behind Spain for hand outs
It is one thing to help nations struggling with problems beyond their control, possibly after a natural disaster, but the Eurozone crisis has been self-inflicted by a bunch of Eurocrats who wanted to force the pace on integration. Germany and France are the main culprits, and THEY should pay, not ourselves. Lacking any experience of practicalities, the EU leaders forgot that a 'one size fits all' exchange rate and interest rates would not work.
Go on Osborne ........................I dare you to do it !!
Help the spanish out when just last week it's royality was off gunning down poor elephants in Africa..... No way i say! Too many countries with their hand out wanting cash handouts look at Pakistan we gave them cash and look at them now showing off their new missiles, eh don't think they are really hard up do you?. It's time to put ourselves first, no more aid, handouts, bailouts call it what you will till we are back on our feet and in a situation to help others, who's helping us?