George Osborne claimed the UK would be kept out of the latest Brussels deal to prop up the struggling Mediterranean country.

Taxpayers will have to fork out more than £1billion in a second Greek bailout – at the same time as losing millions in loan interest repayments from Ireland.


George Osborne claimed the UK would be kept out of the latest Brussels deal to prop up the struggling Mediterranean country.

But because of the UK’s multi-billion pound stake in the International Monetary Fund, the Government cannot escape contributing to the £96billion agreement.

The UK holds a 4.5% stake in the IMF, which is expected to make up around 30% of the bail-out to Greek PM George Papandreou’s debt-laden nation. The other 70% will come from countries in the Eurozone, led by Germany under Angela Merkel.

The agreement, thrashed out by EU leaders on Thursday, is the second time in a year British taxpayers have had to contribute £1billion to bail out the Greeks.




British banks are also exposed to Greece’s £298billion overall debt – which is 60% more than its annual Gross Domestic Product.

But there was good news yesterday as shares rose over the new rescue package.

UK and French markets gained more than 1% in morning trading, before slipping slightly, with the FTSE 100 index ending up 0.6% and the Cac 0.7% higher.

But last night it emerged Britain has been forced to slash the interest we charge Ireland for the £3.26billion loan made in November as part of the complex debt deal. Mr Osborne insisted easing the pressure on our near neighbours was in the UK’s “national interest”. The Chancellor said “We stayed out of the Greek bailout as promised. But, for Britain, Ireland is a special case. Our loan will help them and is in our national interest.”

He vowed the interest, which was fluctuating at around 5.9% would not fall below the 3% cost to Britain of making the loan.




The Irish government came away from the crisis summit with another victory, after Eurozone leaders announced they would continue lending it money beyond 2013 – if it is not able to borrow on the markets. Experts said this was another bailout. Despite the financial markets welcoming the deal, some critics claim it was the first step to a United States of Europe. Tory MP Douglas Carswell said it was “very bad news” and likened membership of the euro to being stuck in a “burning building with no exit”. Euro leaders also failed to dampen concerns that they were using the crisis to increase the EU’s power.

French President Nicolas Sarkozy revealed his ambition was “to seize the Greek crisis to make a quantum leap in eurozone governance”.

The latest international bail-out is seen as an attempt to finally ensure the stability of the single currency and stave off worries the debt crisis will spread to Italy and Spain.

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