7 Apr 2012

Caution needed over IMF money - Greens

6:00 am on 7 April 2012

The Green Party says the country's economy is vulnerable and the Government should be cautious about offering more money to bail out debt-ridden European economies.

In recent days the head of the IMF, Christine Lagarde, has called on the 187-member countries to contribute $US500 billion of new money to the fund.

Finance Minister Bill English has said New Zealand is willing to consider that request because avoiding a meltdown in Europe is beneficial for the world economy and New Zealand.

The country has already given the IMF close to $100 million for bailouts of Portugal and Greece.

But the Greens' associate finance spokesperson, Kennedy Graham, says at this stage the IMF should look to other countries that have been more profligate, to take the first step.

He says it is a tough call to decide whether to send money to the IMF to bail out European countries to restore global financial stability, or keeping that money in New Zealand to shore up the domestic economy.

"If you look at the comparative stats, New Zealand is not that far off the worst debt-ridden countries ... we need to err on the side of caution and play it safe for ourselves here," he says.