Page last updated at 09:18 GMT, Tuesday, 10 March 2009

Darling urges mutual EU support

Alistair Darling
Mr Darling said richer countries had a 'moral imperative' to help

Alistair Darling is calling on the EU's richest countries to step up help for more fragile member states, saying all nations are "dependent" on one another.

By acting together, the EU could make a "real difference" to help those of its members with the most serious economic problems, the UK's chancellor said.

Wealthy nations must also give more resources to the International Monetary Fund to combat global poverty, he said.

Up to 90m people are at risk because of the financial crisis, he has said.

'Broad shoulder'

The chancellor says some newer EU countries, in Eastern and Central Europe, face funding gaps that must be addressed by combined action before their position becomes too "acute".

The European Central Bank's emergency 25bn euros (22.9bn) fund available to support countries in difficulties should be topped up, he told the BBC.

"In Europe we can do more to help those countries that may be getting into difficulties," he said, adding that all EU members must do their bit to offer a "broad shoulder" of support.


"They may not be acute yet but there are certainly difficulties that if you don't sort out will come back to bite the rest of us."

It was in the interest of all member states to do their bit as they were dependent on each other for trade in the same way as Europe was dependent on other areas of the world.

At a meeting of G20 finance ministers this weekend in the UK, Mr Darling will press for the world's richest countries to do more to help both developing nations and previously strong emerging economies which are now in financial difficulties.

'Moral imperative'

Rich countries had a "moral imperative" to do more, he said.

"We are all in this together," he said. "Politics are all global now and that is why we need to take action."

"One of the things we are discussing at the G20 meeting is how do we help each other because if we do that then this downturn will be a lot less painful than otherwise would be the case."

Gordon Brown has backed calls for a new international fund to help poor countries through the economic crisis.

BBC political correspondent Iain Watson said Mr Darling was calling for a substantial increase in resources for the IMF, which has identified 26 countries that are particularly vulnerable to the financial crisis.

Mr Darling has not said how much more money is needed to support EU countries, in particular, but has indicated that central and eastern European economies face a $100bn "financing gap" this year.

World Bank head Robert Zoellick has proposed a "vulnerability fund" to help developing countries, financed by 0.7% of the money the richest countries are spending on their economic bail-outs.

On Monday Gordon Brown said the global financial crisis had hit "the poorest hardest" and pledged to work with the World Bank and other G20 countries to build support for a new fund.

Mr Brown said next month's summit of the world's biggest economies in London would include plans to crack down on tax havens which "siphon off" money from poor countries.

He said the poorest countries had been worst hit by last year's oil and food price crisis, the worldwide financial crisis and the climate change crisis.

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