By Heather Scott

WASHINGTON (MNI) – UK Chancellor of the Exchequer George Osborne
said Wednesday the global recovery is improving but remains fragile, and
susceptible to rising oil prices, which he called a concern.

Actions by the European Central Bank have helped ease fears of a
euro zone bank failure or sovereign debt crisis, and confidence has
improved, Osborne said in an interview with PBS’s Charlie Rose.

“Confidence is coming back. I’d say it’s still fragile, and I’d
look at, for example, the oil price as something we should be concerned
about,” Osborne said, according to a transcript of the interview.

The high oil price “is something all economies will be concerned
about,” he said, noting “we saw, a
year ago, what happens when you get a sustained high oil price.”

However, Osborne said the current spike is different: “It doesn’t
quite have the same spike feeling that it did a year ago. It seems more
like a sustained increase, partly driven by demand, but nevertheless,
it’s something we should be concerned about.”

But fears of a major crisis in the euro zone have dissipated,
largely due to the ECB action, and as a result of the recent agreement
on a new program for Greece, he said.

“I think the difference is that even if the program does not work
out exactly as planned, I think the rest of the euro area are in better
shape than they were to deal with that,” he said. “So the European
Central Bank is being much more active than it was, say, last fall. And
we’ve also got now plans effort to try and correct this firewall, this
larger bailout fund.”

Asked about contributing more resources to the International
Monetary Fund, Osborne repeated the stance that the euro area must first
put up its own funds.

He said “everyone is saying, whether you’re talking to me as the
British finance minister or the Chinese finance minister or the Japanese
finance minister or whoever around the world, we’ve got to first see the
color of the euro zone money, we need to see more of a contribution from
euro zone countries to their own bailout funds before we can have that
conversation about whether other countries of the world need to enhance
the funds of the IMF.”

He said that issue is likely to be the key point of discussion when
the world’s finance ministers gather in Washington in mid-April for the
IMF Spring meetings.

** MNI Washington Bureau: 202-371-2121 **

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