George Osborne was resisting heavy pressure today to give an early promise of billions of pounds from the British taxpayer to help bail out countries struggling from the financial crisis.
Arriving in Washington for a summit of the International Monetary Fund, the Chancellor faced immediate demands to follow Japan’s lead in pledging a major contribution to an upgraded firewall against new global shocks.
But with America threatening to give nothing at all, Mr Osborne stood back and waited to see what other big players, including China and Canada, would do. IMF chief Christine Lagarde wants every country to strike a deal tonight for a £250 billion fund.
Turning the thumbscrews on Mr Osborne, she said: “The UK is a founding father of the IMF… It’s always been a very loyal partner when it’s tough… It’s not in the interest of the UK to have a weak euro.”
Japan promised £35 billion before the meeting. However, a British official said the Chancellor did not rule out giving nothing. “He is not going to be pushed into anything. He is waiting to see what the others do,” the official said.
Earlier this year Mr Osborne said “there is a case” for increasing the pot and he would have to “think very hard” about rejecting any request.
But he cautioned Britain stands ready to boost its contribution only if certain conditions are met. He wants assurances there will be no funds specific to the eurozone and that bailouts are for countries not currencies.
Parliament has previously approved about £40 billion to the IMF fund. Any new pledge of over £10 billion would need a vote by MPs.
