Brown appeals for billions from China and Gulf to inject billions into IMF
Published 29/10/2008 | 13:29
The Prime Minister appealed to China and the Gulf states yesterday to pour hundreds of billions of pounds into the International Monetary Fund, as he warned that the organisation's $250bn (£160bn) reserves "may not be enough" to bail out countries hit by the global economic crisis.
Gordon Brown insisted immediate action was needed to boost IMF coffers, saying it was vital to prevent the "contagion" of financial crisis spreading to Eastern European economies. Earlier this week, the IMF said that it was offering a £10.4bn loan to Ukraine and financial help to Hungary to maintain stability in the face of crumbling confidence in banks and stock markets.
Mr Brown said that he would fly to the Gulf at the weekend to hold talks with the leaders of the oil-rich states. He will also speak to the Chinese Premier Wen Jiabao before the end of the week to press his case for billions to be pumped into the IMF to allow it to support faltering economies.
The Prime Minister defended soaring levels of borrowing in Britain, insisting that the Government was right to break its fiscal rules to allow spending to continue to counteract the effects of the downturn. He declared: "We are in unique times. In these circumstances what you have to do is what is right for the economy, and what is right for hard-working families and for businesses and for home-owners to get the economy moving again."
Today, the Chancellor Alistair Darling will lay the groundwork for the Treasury to relax its self-imposed limits on borrowing, using his annual Mais lecture to argue that borrowing can rise in the short term to fund the Government's three-year spending plans.