Saudis may top up bailout fund

November 3, 2008
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, DOHA, November 3 – British Prime Minister Gordon Brown said he expected Saudi Arabia to give more money to boost the International Monetary Fund\’s ability to bail out nations hardest hit by worldwide economic chaos.

The IMF has 250 billion pounds (315 billion euros, 400 billion dollars) available to help countries struggling to stay afloat — but Brown wants to increase this by hundreds of billions of dollars.

"The Saudis will I think contribute like other countries so we can have a bigger fund worldwide," said Brown, who is on a four-day tour of oil-rich Gulf states to drum up support for his plan.

"I think people want to invest both in helping the world get through this very difficult period of time but also I think people want to work with us so we are less dependent on oil and have more stability in oil prices."

Brown spoke a day after talks with Saudi King Abdullah, who will attend a special Group of 20 summit of leading industrialised and developing nations in Washington on November 15 devoted to the unfolding crisis.

Speaking to British and Saudi business leaders on Sunday, Brown said it was in the interest of Gulf states to help other nations out to prevent economic "contagion" spreading.

He went on to call for more stable oil prices to help the world economy.

Gulf states have been shaken by oil prices sliding below 60 dollars a barrel after record highs of nearly 150 dollars in July, as traders anticipate less demand for oil on account of the economic slowdown.

Qatar\’s Prime Minister Sheikh Hamad bin Jassem bin Jabr al-Thani said in Doha, where he welcomed Brown, that he believed that 70 to 90 dollars would be a "fair" price for a barrel of oil.

"We wish that we had fixed price but that\’s a market," he said. "High prices affecting the economy and low prices affecting the economy so it\’s very important to think about prices that can be workable for both sides."

In Latin American meanwhile, Venezuela, another major oil producing state, will "expropriate" its banks if hit by financial crisis, the country\’s outspoken leader said Sunday.

"If something similar comes to pass in Venezuela, you should not have the slightest doubt that I won\’t give a penny to the banks — I\’ll expropriate them," said President Hugo Chavez, speaking Sunday in the southeastern state of Barinas.

The Venezuelan leader said he found it "strange" that rich countries which "have no money to fight poverty, from one day to the next come up with billions of dollars (to bail out the banks)."

They remain unable, he chided, to finance "the production of food and medicine or to support education, but can help out the bankrupt bankers."

Portugal\’s Finance Minister Fernando Teixeira dos Santos said the Socialist government in Lisbon would propose nationalising the Banco Portugues de Negocios to parliament.

The bank, which has sustained heavy losses, would be put in the hands of state-owned Caixa Geral de Depositos, Portugal\’s largest bank.

Dos Santos said the size of Porto-based BPN\’s losses — estimated at around 700 million euros — precluded the possibility of providing new aid to the bank. BPN posted net profits of 56.7 million euros last year.

The announcement came after the European Commission — which enforces EU competition law — said Thursday it had approved Portugal\’s package to support the crisis-struck financial sector.

Finance ministers from the 15 EU member states that use the euro meet Monday in Brussels, a few hours after the European Commission puts out its latest economic forecasts.

In Germany, Economy Minister Michael Glos said steps to be rolled out Wednesday to help Europe\’s biggest national economy weather the global economic crisis would create or guarantee nearly one million jobs.

But German sportscar maker Porsche, which owns 74.1 percent of Volkswagen, said it would extend its Christmas shutdown by three days "due to a difficult global economic situation, especially in the United States."

In Switzerland, unemployment could soar to 3.5 percent if growth next year falls below one percent, said Serge Gaillard, head of the State Secretariat for Economic Affairs\’ employment unit. It now is 2.4 percent.

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