A contingencies fund or contingency fund is a fund for emergencies or unexpected outflows, mainly

economic crises A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and ma ...

European Union

The

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...

created a vast contingency fund in 2010 to counteract the

Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.

. European finance ministers, the

European Central Bank The European Central Bank (ECB) is the central component of the Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's Big Four (banking)#International ...

(ECB), and the

International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...

(IMF) took steps to address the government debt crisis in Europe, which began in

Greece Greece, officially the Hellenic Republic, is a country in Southeast Europe. Located on the southern tip of the Balkan peninsula, it shares land borders with Albania to the northwest, North Macedonia and Bulgaria to the north, and Turkey to th ...

by establishing a joint EU-IMF program to provide access to nearly $1 trillion in loans for the 16 eurozone nations in the event that they faced difficulties in borrowing from world bond markets. The program aimed to give Greece financial stability to balance its budget, restructure its economy, and avoid borrowing from the open market. Overall, the initiatives sought to restore confidence in European governments and safeguard the nascent global economic recovery.

India

National Contingency Fund

Article 267(1) of the Indian Constitution authorised the establishment of a contingency fund of India. Accordingly, in 1950, the Indian Parliament enacted the ''Contingency Fund of India Act 1950''. The Contingency Fund of India exists for disasters and related unforeseen expenditures. The fund is administered by the Finance Secretary (Department of Economic Affairs) on behalf of the President of India and it can be operated by executive action. In 2005, it was raised from Rs. 50 crore to Rs 500

crore Crore (; abbreviated cr) denotes the quantity ten million (107) and is equal to 100 lakh in the Indian numbering system. In many international contexts, the decimal quantity is formatted as 10,000,000, but when used in the context of the India ...

. In 2021, it was proposed to raise the fund to Rs 30,000

State contingency funds

Similarly, a Contingency Fund for each Indian State is established under Article 267(2) of the Constitution, placing funds at the disposal of the Governor to enable them to make advances to meet urgent unforeseen expenditure, pending authorisation by the State Legislature. The corpus of the funds varies across states and the quantum is decided by the State legislatures.

Spain

In Spain, the contingency fund is used in economic crisis for public work and similar stimulus activities. There is

social security Welfare spending is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifically to social insurance ...

contingencies fund called reserve fund, to pay

pension A pension (; ) is a fund into which amounts are paid regularly during an individual's working career, and from which periodic payments are made to support the person's retirement from work. A pension may be either a " defined benefit plan", wh ...

United Kingdom

In the early part of the nineteenth century, the ''Civil Contingencies Fund'' was created in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

. It is held by the

Treasury A treasury is either *A government department related to finance and taxation, a finance ministry; in a business context, corporate treasury. *A place or location where treasure, such as currency or precious items are kept. These can be ...

, and its use is regulated by the Miscellaneous Financial Provisions Act 1946. It may be used for urgent expenditure in anticipation that the money will be approved by Parliament, or for small payments that were not included in the year's budget estimates. The Contingencies Fund Act 1974 (c. 18) sets the size of the fund as two percent of the amount of the government budget in the preceding year. This was temporarily amended by the Contingencies Fund Act 2020 and later the Contingencies Fund Act 2021 in light of the

COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...

. When Parliament votes to approve the urgent expenditure, the money are repaid into the Contingencies Fund. As Parliament is effectively forced to approve actions '' ex post facto'' (after they have happened), the Treasury's use of the fund is scrutinised in detail by the

Public Accounts Committee A public accounts committee (PAC) is a committee within a legislature whose role is to study public audits, invite ministers, permanent secretaries or other ministry officials to the committee for questioning, and report on their findings subseque ...

Notes

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References

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Economic crises Public finance