IMF loans 'destigmatised' by G20 agreement

Requesting a loan from the new-look International Monetary Fund (IMF) will become less of a stigma for national governments in future, a British cabinet minister has predicted.

Speaking anonymously to the Daily Telegraph newspaper, the minister suggested that the trebling in size of the fund, agreed at last week’s London G20 summit, would have profound implications for the way in which it is used.

The IMF has seen an increase in the number of loan requests it has received over recent months.

Nations including Iceland and the Ukraine have requested emergency loans from the IMF over recent months, due to the devastating effects the credit crunch and financial crisis has had on their public finances.

It was partly as a result of this increased activity that the G20 leaders agreed to expand the fund to $750 billion.

The minister said: ’Previously a country would only go [to the IMF] if they were in a very bad state. It was a bit like going to accident and emergency to get urgent help.’

He added: ’This new facility will not be like that. It is a bit more like getting wellbeing care or even like going to a spa to recuperate.’

The UK last asked for IMF assistance in 1976, under the Labour government of prime minister James Callaghan.

Widely seen as a national embarrassment at the time, the loan has since been seen as a key factor in the Conservative victory at the subsequent general election.ADNFCR-2318-ID-19109421-ADNFCR