LONDON Jan 19 International Monetary Fund
Managing Director Dominique Strauss-Kahn said on Monday he
feared more countries may need IMF bailout packages and said it
was not inconceivable that Britain might one day need help.
"I'm afraid, we're not hoping that, but I'm afraid that
some other countries, not only in eastern Europe, but all
around the world (may need help)," he said when asked if he
believed other countries, particularly in Europe, would have to
seek IMF bailouts.
He was speaking in a BBC interview, an excerpt of which was
broadcast on Monday.
The IMF has recently agreed packages for several countries,
including Iceland, Hungary and Ukraine.
Strauss-Kahn said he did not think Ireland or Britain would
need an IMF bailout to overcome the effects of the global
On Britain, which had to seek IMF help in 1976, he said:
"It has been part of the history several years ago, but it is
not the case today."
Asked if he was absolutely confident the British government
might never seek IMF help, he said: "We never know, you know.
One year ago, if somebody had said that a Republican government
in ... the U.S., would nationalise part of the banking system
you would have said it's totally impossible. It happened. So
never say never."
"But, at this juncture, there is no risk for advanced
economies (except for) some very small advanced economies like
Iceland, for instance, for specific reasons, to need some kind
of bailout," he said.
Later on Monday, Britain will throw its banks another
multi-billion pound lifeline by allowing them to insure against
steep losses and guaranteeing their debt to stop the credit
crunch pushing the economy into a deep slump.
The government has already announced it will spend billions
of pounds to rescue banks and to try to stop the economy
falling into a deep recession.
The weak British economy and deep cuts in interest rates
have led to a sharp fall in the value of sterling against the
In 1976, the British government was forced to ask the IMF
for help after a slump in the value of sterling.
(Reporting by Adrian Croft; Editing by Tomasz Janowski)