UK government last night voted through a proposal to make extra loans worth around £9bn available to the International Monetary Fund (IMF).
MPs won a Commons vote by a majority of 28, authorising the Treasury to make the additional loans, despite opposition from a number of Labour and Conservative MPs.
The Treasury said there was little financial risk as the IMF has never failed to repay a loan made by a contributing country. They also said the loan would not impact borrowing levels it counts as a as an exchange of a financial asset, on which interest is paid to the UK.
The parliamentary approval – by 274 votes to 246 – means that the maximum amount of British money the IMF can borrow will increase from £10.7bn to £20.15bn. The move comes after it was agreed in April 2009 at the G20 London summit that the IMF would require extra resources to meet the needs of its member countries during the ongoing global financial crisis. The Treasury said this was agreed well before the Greek debt crisis.
The UK has so far contributed £1.2bn to the original bailout of Greece, while the cost of rescuing the Irish and Portuguese governments has exceeded £11bn.