Osborne: UK will not fund eurozone bailout

The Chancellor George Osborne has pledged to stop cash from British taxpayers being used to fund the eurozone bailout.

According to the Telegraph, Osborne told MPs he would not allow the IMF - which is partly funded by British taxes - to provide cash for the new eurozone bailout fund announced yesterday morning.

The Chancellor, speaking in the Commons, said: "Britain will not be putting money into the bailout fund either directly or through the IMF."

He also ruled out IMF involvement amid growing speculation the organisation may be asked to help bankroll the expansion of the European rescue fund to €1trn (£880m).

Osborne said intervention in the rescue fund went well beyond the IMF's remit.

"The IMF exists to support countries, it does not exist to support currencies," Osborne said. "The IMF contributing money to the eurozone bail-out fund, no; Britain contributing money to the eurozone bail-out fund, no. That is Britain's clear position."

Policymakers in Europe moved to tackle the crisis by unveiling a package which will also see Greek debt holders take a 50% haircut on their bonds. Banks across the eurozone are also going to recapitalise in order to provide an additional buffer in times of severe stress.

Yesterday's deal lifted markets, with indices across the globe all finishing higher as shares recovered more of the losses they have seen in the recent sell-off.