George Osborne rules out more bailout funds without credible eurozone firewall
Britain and other leading economies are not ready to fund another eurozone bailout, UK Chancellor George Osborne said on Sunday.
Britain and other leading economies are not ready to fund another eurozone bailout, UK Chancellor George Osborne said on Sunday.
In an interview with Sky News, Mr Osborne said: "We are prepared to consider IMF resources but only once we see colour of eurozone money and we have not seen this. Photo: PA
Telegraph staff and agencies
2:26PM GMT 26 Feb 2012
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Speaking as finance ministers from the world's 20 most powerful economies met in Mexico for the G20 summit, the Chancellor said extra funds would not be handed over until countries who use the struggling single currency commit resources themselves.
In an interview with Sky News, Mr Osborne said: "We are prepared to consider IMF resources but only once we see colour of eurozone money and we have not seen this.
"While at this G20 conference there are a lot of things to discuss, I don't think you're going to see any extra resources committed here because eurozone countries have not committed additional resources themselves, and I think that quid pro quo will be clearly established here in Mexico City."
Pressure to mount a large enough financial firewall to head off eurozone sovereign debt concerns has been mounting this weekend, after America, Brazil, and the Organisation for Economic Cooperation and Development all pushed for a funding increase.
Angel Gurria, the head of the OECD, set the tone at the conference on Saturday, calling for about $1.5 trillion in "firewall" funds aimed at restoring confidence in European countries' debt.
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"We still have to build the mother of all firewalls," Gurria said. "The thicker the firewall is, the less likely we'll have to use it."
Guido Mantega, the finance minister of Brazil, said "there is a very strongly shared opinion that first, the European countries should strengthen their firewall."
"The emerging countries are only going to help under two conditions," Mantega said. "First, that they reinforce their firewalls, and second that reforms are implemented in the International Monetary Fund."
US Treasury Secretary Timothy Geithner said: "I hope we´re going to see, and expect we´ll see, continued efforts by Europeans to put in place a stronger and more credible firewall."
German Finance Minister Wolfgang Schaeuble told reporters that European leaders will tackle the adequacy of the region's firewall in March. The issue will be on the agenda of a European Union summit that starts next Thursday in Brussels.
"It will be reviewed again, also in the light of the developments that have since occurred, whether the stated dimension of the mechanism is enough or not," he said.
Mr Schaeuble’s remarks contrast with comments he made in an editorial in Mexican newspaper El Universal on Friday.
Mr Schaeuble wrote: "should we increase even more the firewalls? The response is a resounding no." Schaeuble also rejected sharing other eurozone country debts, or expanding the euro money supply to meet countries' budget gaps.
"This would not only not solve the problems of debt and competitiveness that brought the affected countries to their current state of affairs, it would also discourage their governments from carrying out consolidation and reform."
Germany has so far resisted calls to increase the amount of the eurozone's permanent rescue fund. Jens Weidmann, president of Germany's central bank hit back this week at criticism that Europe’s largest economy was not doing enough to solve the Continent’s crisis.
Germany bore a “disproportionately large share” of the financing of the two bail-out funds, he said, adding that there was a misconception the country had managed to “dodge the flames of the current crisis”.
Europe is making quite a bit of progress in convincing the world that they´re not going to allow a catastrophic financial failure," US Treasury Secretary Timothy Geithner told an audience of bankers and policymakers in the Mexican capital. He contrasted the mood now with the fear gripping financial markets as recently as October.
Britain and other leading economies are not ready to fund another eurozone bailout, UK Chancellor George Osborne said on Sunday.
Britain and other leading economies are not ready to fund another eurozone bailout, UK Chancellor George Osborne said on Sunday.
In an interview with Sky News, Mr Osborne said: "We are prepared to consider IMF resources but only once we see colour of eurozone money and we have not seen this. Photo: PA
Telegraph staff and agencies
2:26PM GMT 26 Feb 2012
Comments4 Comments
Speaking as finance ministers from the world's 20 most powerful economies met in Mexico for the G20 summit, the Chancellor said extra funds would not be handed over until countries who use the struggling single currency commit resources themselves.
In an interview with Sky News, Mr Osborne said: "We are prepared to consider IMF resources but only once we see colour of eurozone money and we have not seen this.
"While at this G20 conference there are a lot of things to discuss, I don't think you're going to see any extra resources committed here because eurozone countries have not committed additional resources themselves, and I think that quid pro quo will be clearly established here in Mexico City."
Pressure to mount a large enough financial firewall to head off eurozone sovereign debt concerns has been mounting this weekend, after America, Brazil, and the Organisation for Economic Cooperation and Development all pushed for a funding increase.
Angel Gurria, the head of the OECD, set the tone at the conference on Saturday, calling for about $1.5 trillion in "firewall" funds aimed at restoring confidence in European countries' debt.
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24 Feb 2012
Greek bond swap begins amid Germany's bailout doubts
24 Feb 2012
Soaring oil prices will dwarf the Greek drama
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"We still have to build the mother of all firewalls," Gurria said. "The thicker the firewall is, the less likely we'll have to use it."
Guido Mantega, the finance minister of Brazil, said "there is a very strongly shared opinion that first, the European countries should strengthen their firewall."
"The emerging countries are only going to help under two conditions," Mantega said. "First, that they reinforce their firewalls, and second that reforms are implemented in the International Monetary Fund."
US Treasury Secretary Timothy Geithner said: "I hope we´re going to see, and expect we´ll see, continued efforts by Europeans to put in place a stronger and more credible firewall."
German Finance Minister Wolfgang Schaeuble told reporters that European leaders will tackle the adequacy of the region's firewall in March. The issue will be on the agenda of a European Union summit that starts next Thursday in Brussels.
"It will be reviewed again, also in the light of the developments that have since occurred, whether the stated dimension of the mechanism is enough or not," he said.
Mr Schaeuble’s remarks contrast with comments he made in an editorial in Mexican newspaper El Universal on Friday.
Mr Schaeuble wrote: "should we increase even more the firewalls? The response is a resounding no." Schaeuble also rejected sharing other eurozone country debts, or expanding the euro money supply to meet countries' budget gaps.
"This would not only not solve the problems of debt and competitiveness that brought the affected countries to their current state of affairs, it would also discourage their governments from carrying out consolidation and reform."
Germany has so far resisted calls to increase the amount of the eurozone's permanent rescue fund. Jens Weidmann, president of Germany's central bank hit back this week at criticism that Europe’s largest economy was not doing enough to solve the Continent’s crisis.
Germany bore a “disproportionately large share” of the financing of the two bail-out funds, he said, adding that there was a misconception the country had managed to “dodge the flames of the current crisis”.
Europe is making quite a bit of progress in convincing the world that they´re not going to allow a catastrophic financial failure," US Treasury Secretary Timothy Geithner told an audience of bankers and policymakers in the Mexican capital. He contrasted the mood now with the fear gripping financial markets as recently as October.
