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€50bn shortfall for IMF as UK ducks out

Tuesday 20 December 2011 - by

EU finance ministers failed to reach the agreed €200bn ($261bn) target of extra funding to be injected into the International Monetary Fund after the UK refused to inject any further funds, favouring a global agreement instead.

At the EU summit earlier this month, member states arranged to pump in €200bn to boost the IMF for future eurozone bailouts, among other measures to quell the growing sovereign debt crisis, but the UK vetoed the new treaty proposals.

Chancellor George Osborne stood firm on Monday, resisting eurozone calls for Britain to contribute €31bn ($40bn) to the fund saying that he favours contributing under a global agreement, rather than an EU one.

Eurozone countries managed to raise €150bn ($196bn) and are now reliant on contributions from member states outside the eurozone to make up the €50bn shortfall. Critics say that even if the €200bn target is met, it will make little difference as Italy alone needs €300bn ($392bn) in refinancing.

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