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In Britain, IMF donation sparks discord

April 21, 2012 at 1:07 PM   |   Comments

LONDON, April 21 (UPI) -- British Chancellor of the Exchequer George Osborne said it was in the country's best interest to loan $16 billion to the International Monetary Fund.

Responding to an outcry over the money, Osborne said, "Britain has a massive interest in a stable world economy and institutions like IMF help ensure that stability -- if you don't have that you lose jobs in Britain and the British economy suffers."

Others have decried the move as "throwing good money after bad," The Daily Telegraph reported Saturday.

However, "We're very clear our money comes with conditions -- first, it's [a] loan, which comes with interest and gets paid back, and no one has ever lost money lending money to the IMF," Osborne said in an interview with the British Broadcasting Corp.

He also said the money would not go to strengthening the euro, the currency Britain does not use, but is shared by 17 other European countries.

"It's not a special fund of the Euro -- I'm not pretending the eurozone doesn't have problems but in the end we've got to be, as Britain, people who believe in strong international institutions like the IMF, which more than 60 years ago Britain conceived and had the idea of," he said.

Others are pointing out that the United States and China have not responded to the financial crisis in Europe with increases to their contributions to the IMF. China, however, is expected to do so, the newspaper said.

"It is disappointing that the chancellor has not taken the opportunity to press the wealthy eurozone countries to dig into their own pockets and establish a strong firewall of their own, before offering up more funding from Britain," said Shadow Chancellor Ed Balls.

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