Sweden to support eurozone stability fund
Published: 20 Dec 2011 07:58 GMT+01:00
Updated: 20 Dec 2011 07:58 GMT+01:00
Sweden agreed on Monday night to help stabilize the euro by pledging to make loans to the International Monetary Fund (IMF) to strengthen a eurozone bailout fund.
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Sweden, the Czech Republic, Denmark, and Poland each pledged Monday to make loans to the IMF for use in stabilizing the debt-laden eurozone, Luxembourg Prime Minister Jean-Claude Juncker said.
The loans would come as an additional boost to the €150 billion ($195 billion) pledged to the IMF stability fund by the 17 eurozone countries on Monday night.
The four non-eurozone countries "indicated their willingness to take part in the process of reinforcing IMF resources," the eurozone chief said after a conference call among European Union counterparts, adding in a statement that Britain "will define its contribution early in the new year in the framework of the G20."
However, Sweden, along with the other three non-eurozone countries who agreed to participate, must first gain approval for the deal from parliament.
Since the December 8-9 EU summit, a number of countries have said it may be difficult to contribute to the IMF fund, which EU leaders had hoped would reach €200 billion.
While eurozone countries planned to contribute €150 billion, the remaining €50 billion coming from other EU member states like Sweden which don't use the common European currency.
Following Monday night's discussions, Swedish finance minister Anders Borg said Sweden would be ready to contribute up to 100 billion kronor ($14 billion), a figure mentioned last week by Riksbank head Stefan Ingves.
However Borg emphasized that a final decision by Sweden on how much it would contribute to the fund would depend in part on the actions of other countries.
"We need clarity that other countries are prepared to contribute," Borg told reporters, according to Dow Jones Newswires.
“Key for us is that normal [IMF] rules apply to these countries [which plan to lend]; we're very suspicious of flexible credit lines because it presuppose that the countries have sustainable long-term finances and are strong when it comes to their levels of foreign debt,” Borg told the TT news agency.