A government minister has suggested that taking out an IMF loan will become less of a stigma to nation states in future, following last week's G20 agreement to expand the fund.
The expansion to the International Monetary Fund (IMF) agreed at last week's G20 meeting could destigmatise borrowing from the organisation for nations such as the UK, a cabinet minister has indicated.
According to the top-level government figure, there should be no shame in countries tapping the fund for cash if their public finances are under strain. The minister even compared taking out such a loan to going to a spa, in an interview with the Daily Telegraph.
Leaders at the London summit agreed on Thursday that the IMF should be trebled in size to $750 billion - amid predictions that demand for loans from the fund would increase over the months to come. Countries including Iceland and Ukraine have recently asked the fund for loans due to the effects the credit crisis and global downturn have had on their public finances.
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. 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 the IMF for cash in 1976. Political analysts have pinpointed the loan request as a factor behind the then-Labour government of James Callaghan being defeated at the next general election in 1979.
