Eurozone Crisis

Natascha Engel Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

They were all written by him.

The Foreign Secretary described the euro as a

“burning building with no exits”.

That was his point. As I said, the break-up of the euro, disorderly or otherwise, this autumn or in the foreseeable future, would cause enormous instability to the entire global economy and do enormous damage to the British economy.

[Natascha Engel (North East Derbyshire) (Lab)]

Will the Chancellor provide some clarification? He said that no UK funding would go to the euro bail-out. When he talked about supporting the IMF, therefore, did he mean with advice and suggestions only or is he using UK taxpayers’ money to support it? If the latter, how will he force the IMF to ring-fence the money so that it does not pay for a euro bail-out?

[Mr Osborne]

Let me be clear to the hon. Lady. The IMF potentially has a role—but that is yet to be decided—in helping the eurozone to organise its special purpose vehicle, provide technical support and do all the things that it is very good at doing, which is stepping in and providing expertise. That is a perfectly legitimate role for the IMF. It has done it in other situations where trust funds and the like have been created around the world. However, we are saying that there should not be IMF resources going into this special purpose vehicle in terms of a lending programme. The IMF lends money to countries with conditions attached, and that is what it should do in the future. It is what its articles require it to do. We do not support, and I do not think that the IMF does either, changing those articles and allowing the IMF to lend money to the special purpose vehicle. We are against that and against Britain contributing to the special purpose vehicle, even if countries such as China or Chinese sovereign wealth funds do contribute.