BRITISH PRIME minister David Cameron is set to defy demands by Labour and Conservative MPs for a vote on UK contributions to the International Monetary Fund – despite IMF chief Christine Lagarde’s declaration that G20 countries had signed up to offer unlimited resources.
The UK has nearly £11 billion (€13 billion) invested with the IMF in so-called special depositary rights, while it has given guarantees to cover more than £29 billion worth of IMF loans to states.
In a House of Commons vote in July, the British government secured permission to increase its cover for fund loans to nearly £40 billion but this does not come into force until 85 per cent of IMF member states have ratified an increase to their contributions.
In Cannes, Mr Cameron insisted that a parliamentary vote is not necessary, since “head room” still exists in the allocation sanctioned by MPs – with 30 Conservative MPs opposed, along with Labour – in July. He won by just 28 votes.
Rejecting charges that the UK is bailing out the euro, Mr Cameron and other senior British figures, such as chancellor of the exchequer George Osborne, have sought to draw a distinction between backing the euro and supporting individual countries that use the currency.
Conservative MP Peter Bone was among those MPs yesterday who expected that the fund pledge made by the PM would go before parliament for a debate. “Oh, I’m sure we would. We debated the last change on the IMF,” he said.
He repeated his belief that states like Portugal and Greece, and maybe Spain and the Republic, should quit the euro. Mr Bone added that the IMF usually puts its money “into sovereign countries which can devalue its currency and increase or decrease its interest rates . . . that’s how countries recover. Obviously, if you try to put money into a euro zone country, they can’t devalue and they can’t set their own interest rates. So that’s not the traditional role of the IMF.”
Mr Cameron will try hard to escape a parliamentary vote, since there is no guarantee he would win one, given that more than 80 of his Tory backbenchers defied him this month in a vote on whether the UK should have a referendum on EU membership.
Last night, Labour said a debate will be necessary since Mr Cameron cannot quantify the UK’s extra contribution to the fund’s coffers since its managing director, Ms Lagarde, claimed that G20 countries are prepared to offer unlimited support.
The IMF should not used in this way, said Labour shadow chancellor Ed Balls: “We can’t have the IMF effectively becoming the central bank of the euro zone. It’s not for British or American taxpayers to stand behind Italy or Spain.”
