HC Deb 27 April 1948 vol 450 cc29-30W
58. Colonel Crosthwaite-Eyre

asked the Chancellor of the Exchequer whether His Majesty's Government concurred in the decision of the International Monetary Fund that its resources should not be available to those benefiting under the Marshall Plan.

Mr. Jay

No. But I am circulating in the OFFICIAL REPORT the text of the relevant resolution of the Board of Executive Directors of the International Monetary Fund, together with an extract from the Minutes of the Board. From these, the hon. and gallant Member will see that the resolution contains not a definite decision to stop drawings, but a provisional statement of policy.

Following is the resolution:

Although the Fund recognises that a general rule is not sufficient basis for all cases, the Fund must, in examining requests for the use of its resources, take into account the European Recovery Programme especially with respect to members who participate in the Programme. Since the E.R.P. is to be handled year by year, related policies on use of the Fund's resources should be developed at similar intervals. For the first year the attitude of the Fund and E.R.P. members should be that such members should request the purchase of U.S. dollars from the Fund only in exceptional or unforeseen cases. The Fund and members participating in E.R.P. should have as their objective to maintain the resources of the Fund at a safe and reasonable level during the E.R.P. period in order that at the end of the period such members will have unencumbered access to the resources of the Fund. This objective conforms with the intention of Article XIV, Section 1, that during the transitional period members should not impair the capacity of the Fund to serve its members or impair their ability to secure help from the Fund after the transitional period.

Following is the extract from the Minutes of the Board:

No member has the right to veto or limit the funds sales of its currency to other members for use in accordance with the Fund Agreement. The Fund recognises, however, that such sales should not have the effect of compelling a country to finance a large bilateral surplus with some countries while it has to make net drawings on its gold and convertible currency reserves for current payments. Such circumstances would fall within the meaning of the "exceptional or unforeseen cases" mentioned in the policy decision of 5th April, 1948, made by the Fund concerning the use of the Fund's resources by E.R.P. countries and would justify request by a country to purchase foreign, exchange from the Fund to make to other members current payments or payments authorised by Article VI, Section 2, but not to build up its monetary reserve. This is in fact the manner in which the Fund is intended to facilitate the system of multilateral payments.

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