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Page last updated at 09:46 GMT, Saturday, 21 January 2012

IMF borrowing mechanism 'profoundly wrong'


This week the International Monetary Fund said it will seek to increase its resources by $500 billion to help stabilise the global economy. The extra money could be used to help countries in the eurozone struggling to pay their debts.

Douglas Carswell MP - one of the Conservatives who rebelled against the extra contribution Britain made to the fund last year - told the programme that he supports the IMF but thinks it is not intervening the way it should in the eurozone as it is "relying on downsizing".

It needs to allow a devaluation of the currency, he said, and that it is "profoundly wrong" for countries with lower GDP to contribute to bailing out richer countries.

Ngaire Woods, a member of the IMF European Advisory Group, said she did not agree with the assertion that the IMF is simply pushing austerity. It is European leaders who should be pushing for growth, she explained, as the IMF has simply an advisory role. Professor Woods also said she believed that Britain is "casting itself at sea" if it does not contribute to the IMF.

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