27/01/2012 08:45 GMT

George Osborne: Eurozone Countries Should Show 'The Colour Of Their Money'

Eurozone countries must show "the colour of their money" in shoring up the single currency before any IMF funds are given to members facing economic collapse, George Osborne said on Friday.

The chancellor said the UK was "ready to play our part" in boosting International Monetary Fund resources to bail out struggling European economies - but only if strict criteria were met.

Britain is expected to be asked to up its contributions to the global body as it seeks to raise an additional 500 billion dollars (£320 billion) - which could mean an additional liability of around £17 billion.

Some senior Tory MPs are angry at suggestions the government will meet that request as they fear the additional contributions will be used to prop up the eurozone.

Parliament has previously approved around £40 billion in support for the IMF, of which about £30 billion has already been committed.

Any new request going beyond the £10 billion "headroom" still available to Mr Osborne would require a fresh vote by MPs.

In a speech at the World Economic Forum in Davos, Switzerland, Osborne said the eurozone economy "has sufficient resources to put the credibility of the firewall beyond doubt".

"All that is required is the political agreement to make those resources available on a credible timescale," he told an event organised by the Confederation of British Industry.

"At the same time the global community - through the IMF - should always be ready to support individual countries that get into trouble and need temporary financing while they adjust.

"The UK is a long-standing supporter of the IMF - indeed we were instrumental in its creation - and we stand ready to play our part in that global effort if certain conditions are met."

Those included a stipulation that there were "no new vehicles or funds specific to the eurozone", full IMF conditionality and the participation of other G20 countries.

"And crucially, IMF resources to support individual countries cannot be a substitute for further credible steps by the eurozone to support their currency," he added.

"In other words, the world needs to see the colour of their money before it contributes any more."

Earlier in January Osborne indicated Britain would consider giving more money to stricken eurozone countries through the IMF.

The chancellor said, however, that any extra money would depend on parliamentary approval. "Britain has always been prepared to provide the resources in the past and will be willing to provide the resources in the future if there is a strong case," he told BBC Radio 4's Today programme on Monday morning.