European Union leaders have pledged to provide some USD 100 billion in extra loans to the International Monetary Fund (IMF) and a system for bailing out non-Eurozone EU members in a bid to keep more countries from falling into the financial abyss. “The decisions that we have made today, and the extra money that is being released, will help ensure that we do everything in our power to return the global economy to growth at the quickest possible opportunity,” British Prime Minister Gordon Brown said. On the closing morning of their regular two-day spring summit, EU leaders agreed to offer 75 billion Euro in lending facilities to the IMF, if it should ask for help, as part of a call to the international community to double the fund’s resources.

That loan will “enable (the IMF) to react better in the context of the crisis,” Czech Prime Minister Mirek Topolanek, who chaired the meeting as the current holder of the EU’s rotating presidency, told journalists. Ahead of the talks, EU diplomats had proposed that the bloc offer the IMF from 75 billion to 100 billion dollars. The EU’s top politicians also agreed to double to 50 billion Euro the credit limit on a fund designed to bail out EU members which do not use the Euro, if they appear on the brink of defaulting on their public debt.

It is the second time in three months that they have decided to double the facility, which involves the EU executive in Brussels, the European Commission, raising money on the international money markets. But politicians said the move should not be interpreted as a sign that they expects more members to follow Hungary, Latvia and Romania, who have already requested some 16 billion Euro in aid from the fund to keep their currencies from meltdown. Latvia’s new prime minister, Valdis Dombrovskis, told Deutsche Presse-Agentur (dpa) that his country may not be able to keep to the deficit limits imposed on it as part of an IMF bailout because of a worse-than-expected downturn, but that he hoped to renegotiate the terms of IMF and EU loans without demanding more funds.

The move is “to show our partners in Central and Eastern Europe that the EU as a whole is ready for solidarity whenever solidarity would be needed. I don’t think that this credit line will be consumed,” Luxembourg premier Jean-Claude Juncker, the head of the informal group of countries which use the Euro, said. He also fiercely denied reports that the European Central Bank was setting up a similar fund to keep crisis-stricken Euro users such as Ireland, Malta and Greece from default. “The question of whether a Euro member could default is purely hypothetical. I have no reason to think this might happen,” he said. At the same time, top officials rejected reports that the European Central Bank had set up a similar facility to bail out countries which use the Euro and which face the risk of default.

“This help cannot be given to Euro members: the EU treaty forbids it. It cannot happen that a Euro country defaults,” Juncker said. The support facility is a special EU system for borrowing money on the international markets to help non- Euro members keep their national finances from default. It is handled by the commission, which is the EU’s executive. It is the second time in three months that the bloc has doubled the size of its bailout system, which until the autumn was capped at 12 billion Euro. Since then, the EU has pumped over nine billion Euro from the fund to keep Latvia and Hungary afloat, while Romania has asked for some seven billion Euro in support. Politicians who backed a further doubling of the facility said that it was important to send a strong signal that the EU was ready to bail out its weakest members. “The resources in the balance-of-payments fund must be made ready,” Austrian Chancellor Werner Faymann said.