Updated, 19.39
BRITAIN HAS RISKED further isolation within the European Union by refusing to contribute in the latest round of lending to the International Monetary Fund – a measure intended to help it fight the European debt crisis.
Chancellor George Osborne told a conference call of EU finance ministers today that Britain would not contribute the €31 billion it would be expected to contribute as part of the latest round of €200 billion in funding to the IMF.
The €200 billion figure – which has been attacked in some quarters as an arbitrary number – was agreed at the summit of European Union heads of government in Brussels two weeks ago, though British PM David Cameron had not agreed to that figure.
Instead, the European Council this evening confirmed that 13 eurozone member states – not including Ireland, Greece or Portugal – would be lending an additional €150 billion to the IMF.
While non-euro states like Sweden, Denmark, Poland and the Czech Republic are all also likely to make contributions, Britain will not do so – instead waiting to “define its contribution early in the new year in the framework of the G20.”
As expected, Germany will be the biggest contributor to the IMF’s new pot, offering €41.5 billion, while France will give €31.4 billion and Italy – whose economy is at risk of collapse as a result of the debt turmoil – will pay €23.5 billion.
Even tiny economies like Cyprus and Malta will chip in, lending €480m and €260m to the IMF respectively.
While the confirmation of the lending deal to the IMF will be welcomed by many – as it marks the first concrete action arising from the Brussels summit two weeks ago – the continued refusal of the UK to participate could bring fresh political pressure on its government.
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