British taxpayers could be forced to contribute billions more to bail out bankrupt eurozone countries, the Chancellor has admitted. George Osborne said he had agreed that Britain’s contribution to the International Monetary Fund to prop up ailing economies could rise.
The UK has already paid £12billion to prop up members of the single currency – through the European Union, the IMF and a direct loan to Ireland. But officials admit Britain may be required to do more if world leaders are to solve the debt crisis and restore confidence in the world economy.
Britain is a senior member of the IMF and is liable for 4.2 per cent of all handouts granted by the fund. A meeting of G20 finance ministers at the weekend agreed that the IMF should consider using its resources to backstop a massive eurozone-led rescue effort which is due to be finalised next weekend.
Mr Osborne made clear that Britain would be prepared to join the new plan as long as it was not a substitute for the eurozone getting its own house in order. But he admitted: ‘We have indicated our willingness to consider our position on resources for the IMF.’ The UK’s potential liabilities via the IMF are capped at $20billion (£12.6billion) and the organisation has so far used only around a quarter of that amount.