British taxpayers will be liable for £1 billion of emergency loans to Greece as European Commissioner tears up ‘black and white’ deal to protect UK from bailout bills
Chancellor George Osborne will today attempt to fight off a European bid to force British public to contribute close to £ 1 billion towards any bailout for Greece.
Sources close to Jean-Claude Juncker, the arch federalist European Commission president, say he wants the United Kingdom to release the funds as part of emergency loans to the country.
This would however break an agreement made in 2010 by David Cameron that Britain would not have to pay, because it is not a member of the Eurozone. Commission officials say the deal was nothing more than a ‘political’ accord without any legal force.
It came as Greece’s Left-wing leaders were forced into humiliating climbdown as the Eurozone cobbled together for a last minute deal in order to avoid the expulsion of the country from the single currency.
Alexis Tsipras said to have been “crucified” by European leaders in late night marathon talks in which he was forced into accepting severe austerity measures and hand even more control to creditors at the price of remaining in the euro.
The capitulation caused anger in Greece. Last night, there were demonstrators who burned the flag of his party, Syriza, on the streets of Athens.
Now, Tsipras faced the hazardous task of getting the deal through his parliament. Creditors have said they will only agree to release additional funds to assist the bear bankrupt economy if the reforms are agreed upon by MPs by tomorrow night.
David Cameron, the Prime Minister and Mr. Osborne welcomed the deal though they warned the risk to the UK economy remained unless there is a lasting solution hammered out.
The chancellor will attend a European finance ministers meeting today, at which he will argue that any demands for the United Kingdom to pay as much as £850 million is a ‘non-starter’.
The Dutch chief of the Eurogroup, Jeroen Dijsselbloem, confirmed yesterday a bailout ‘involving all member states’ will be considered. Britain does not have veto, with approval instead requiring consent of 85% of states, weighted for population-presenting the risk that the UK could be outvoted (http://www.dailymail.co.uk/news/article-3159806/British-taxpayers-liable-1BILLION-emergency-loans-Greece.html (follow this link for more information).
Last night, during telephone calls with European finance ministers, Mr. Osborne said the deal of 2010 must stand.
A source from treasury said “The idea British taxpayers’ money is going to be on the line in this latest Greek deal is a non-starter”
Under the plan of Mr. Juncker, the commission will use the EU budget as the collateral against 8.6 billion euros of short term bridging loans to Greece-opening the prospect the UK will need to pay out.
Greece has been told to find 12billion euros to service its debts by the end of next month or suffer a banking collapse. This is inclusive of 4.2 billion euros to repay the European Central Bank on Monday.
Mr. Juncker, to cover this wants to revive the European Financial Stabilization Mechanism (EFSM), a loans facility that is used to rescue Portugal and Ireland.