IMF Loan Of £10bn 'Not For Eurozone Bailout', Insists George Osborne

'No Country Has Ever Lost Money': George Osborne Defends £10bn IMF Loan

George Osborne has defended his decision to lend £10bn to the International Monetary Fund amid concerns it will be used to bail out the eurozone.

On Friday the chancellor agreed to commit the additional funds to the IMF which he said was vital to protect jobs and growth in this country.

Speaking in the Commons on Monday, Osborne said British taxpayers would not lose a single pound as a result of the loan.

"Lending to the IMF is a loan to the most credit worthy institution in the world," he said. "No country has ever lost money lending to the IMF."

Osborne added: "Not a penny less will be spent on public services; not a penny more will be levied in tax to fund our commitment to the IMF."

"I know of no other mechanism which is so clearly in the British and global interests."

Finance ministers and central bank governors struck the deal to lend over $430bn in total at a meeting in Washington last week.

Alongside the UK's increase, Australia is to contribute an extra $7bn, Singapore $4bn, and South Korea $15bn.

The chancellor said Britain had always been one of the IMF's largest shareholders and biggest supporters.

"We helped create the institution over 60 years ago and our predecessors determined countries would never again turn their backs on the world's problem," he said.

"We will not turn our back on the IMF or turn our back on the world, that would be a betrayal of our country's interests.

However many MPs, including many on his own benches, are worried the money will be used to help fund a bailout of the eurozone.

Shadow chancellor Ed Balls said the deal was a mistake as it meant the IMF would be pressured to help rescue the eurozone economy - which was the job of the European Central Bank.

"He is conspiring in allowing the IMF to become the de-facto central bank of the euro area," Balls said.

"He is putting resources of UK taxpayers and poorer countries at risk because rich eurozone countries won't act."

Balls also said that Osborne had agreed to the precise figure because to commit any more would require the approval of the House of Commons and would expose opposition on the Tory benches.

"Isn't this chancellor running scared of both sides of this House of Commons?" he said.

Tory MP Peter Bone said: "Doesn't the chancellor agree it is bonkers to pour billions and billions of UK taxpayers money to supporting the failed euro?"

And fellow Conservative backbencher, Julian Lewis, asked: "When one's friends are trapped in a burning building isn't the kindest thing to lead them in the direction of the exits in an orderly way, rather than give them billions to stay exactly where they are?"

However Osborne insisted that the government would not allow the money to be used for a eurozone bailout fund. "It is for specific countries, not currencies," he said.

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