European leaders agree to extra stimulus money

Gordon Brown speaks during a press conference at the European Council summit in Brussels.
European leaders have agreed to make $100 billion available to the International Monetary Fund and ?50 billion ($68 billion) to eastern European countries, British Prime Minister Gordon Brown said Friday.

The lending means Europe has “laid the foundations” for the G-20 summit in London in two weeks, Brown told a news conference in Brussels after a European Council summit. “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 world economy to growth at the quickest possible opportunity,” Brown said. The $100 billion being made available to the IMF comes on top of the €400 billion ($545 billion) European stimulus package, Brown said. He said the money is not being handed over to the IMF, but is instead being made available as a loan only if the IMF needs it for crises around the world. The €50 billion for former eastern bloc countries represents a doubling of existing assistance, he said. The IMF issued a report Thursday ahead of the G-20 summit in which it said central and eastern Europe had been especially hard-hit by the economic downturn. The region has large current account deficits and several countries are facing a sharp contraction in capital inflows, the IMF said.

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Countries suffering the most include the Baltics, Hungary, Croatia, Romania, and Bulgaria, the IMF said. European nations, Brown said, are determined to do whatever is necessary to restore jobs and economic growth across the continent. “We are talking about substantial sums that have been agreed today by all the European Union countries and have been agreed unanimously,” Brown said.

Heads of state and financial chiefs from G-20 nations are due to meet in London on April 2. The countries of the G-20 represent 85 percent of the world’s gross domestic product. Brown said he plans to travel next week to New York, Brazil and Chile to continue trying to build consensus ahead of the G-20 summit.