How no could become yes

The “no” that Britain just delivered to the EU over an extra contribution to the IMF adds to the mood music around Britain’s relationship with Europe, but will come as no surprise to EU partners.

Unlike the dawn veto just over a week ago, the afternoon “no thanks” to the IMF was extremely well-trailed. And unlike Brussels just over a week ago we are not in a minority of one, but in the company of the other nine “outs” who also didn’t sign up to this particular venture.

David Cameron first told EU partners he wasn’t up for this at the G20 summit in Cannes. He told them again in Brussels just over a week ago that this wasn’t quite what he thought the IMF was for and it would be better if the eurozone sorted itself out more directly.

 The eurozone 17 countries  went ahead anyway with a statement saying there would be a 200bn euro raised contribution to the IMF from EU members and let it be known that total included a notional 30bn euros from the UK and some contributions from other “outs.” Whitehall saw that as an attempt to lean on us and isn’t budging.

 
But that doesn’t mean there won’t be additional UK contributions to the IMF agreed, maybe even as soon as next month, after the Mexico meeting of the G20. The UK supports increased contributions to the IMF in principle. They send confidence to markets that there’s a well-heeled but stern global grown-up who will bail out and sort out heavily indebted countries.

Also, critically, they only cost donor countries money if the loan defaults, which no IMF loan has ever done. But the UK says the IMF mustn’t turn into a disguised eurozone bail-out fund. So, if China and others are up for it, you may see headlines within a month about an increased UK contribution to the IMF a short time after we said we weren’t up for it. All clear?

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