Monday

3rd Oct 2022

EU states fail to cobble together €200bn for IMF

Eurozone countries on Monday (19 December) agreed to pay €150bn to a special IMF fund but failed to reach their total ceiling of 200bn among all EU states, as pledged at a summit on 9 December, with Britain refusing to contribute to the euro-saving scheme.

After a three-hour long conference organised by Jean-Claude Juncker, Luxembourg's Prime Minister and head of the informal group of eurozone finance ministers, only the contributions of the euro countries were clearly spelled out, amounting to a total of €150 billion.

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  • Non-euro countries are €24bn short (Photo: aranjuez1404)

Germany will be the largest contributor, with €41.5 billion, followed by France (€31.4bn), Spain (€14.8bn) and the Netherlands (€13.6bn). Euro-countries already under an EU-IMF bail-out - Greece, Ireland and Portugal - are not listed as contributors. IMF- supported EU countries outside the common currency - Hungary, Romania and Latvia - will also not be coughing up. Lithuania, still recovering from the financial crisis, and Bulgaria, the EU's poorest member, are not participating, either.

Britain refused to contribute to this special IMF fund to be set up for the eurozone rescue, saying it will top up its share to the general IMF reserves.

"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," British finance minister George Osborne said in a statement.

EU countries, except Britain, had on 9 December pledged to come up with €200 billion within 10 days for a special IMF fund designed to help the troubled eurozone.

British Prime Minister David Cameron later on told the Parliament that the IMF is there to "save countries, not currencies" and that London is happy to help boost the general IMF reserves, but not the special eurozone fund.

Britain's refusal to take part puts pressure on other euro-outs to top up their share of the remaining €50bn to be raised, with Sweden, Denmark, Poland and Czech Republic the only non-euro EU contributors in line to fill this gap.

EUobserver has calculated that they are short of €24 billion, in view of their public statements so far.

Prague has said it would contribute €3.5 billion, Denmark pledged to contribute €5.5bn, while Polish finance minister Jacek Rostowski on Monday gave the figure of €6bn for his country.

Swedish finance minister Anders Borg on Monday night refused to say how much Stockholm will end up paying, after it previously had floated the figure of €11bn, Svenska Dagebladet reports.

Parliamentary approval is needed in several of these contributing countries.

EU to channel €150bn to IMF for its own rescue

EU leaders are discussing an increase of Europe's contribution to the International Monetary Fund by €150bn, which could then be used to rescue troubled euro-countries. Meanwhile, the European Central Bank cut interest rates, but failed to help Italy and Spain.

IMF looking for extra cash to stem euro-crisis

The International Monetary Fund is seeking an extra $500 billion to help stem the eurozone crisis, with world growth forecasts slashed once more Wednesday. But the source of the new funding is unclear.

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