THE UK will strive to avoid paying for any second Greek bailout through European channels, chancellor George Osborne said yesterday, as speculation about another Greek economic crisis intensified.
“We certainly don’t want to be part of any bailout of Greece, a second bailout of Greece,” he said.
However, business secretary Vince Cable seemed to take a different line when asked the same question, merely pointing out that the UK is obliged to pay for international rescue programmes through the International Monetary Fund (IMF) and the EU.
Speculation that Athens might need a second cash injection has mounted as yields on its two-year debt have soared to well over 25 per cent despite its €110bn (£96.6bn) rescue last year.
If Greece does need another bailout to avoid defaulting, the UK is on the hook for 4.5 per cent of the costs through its shareholding in the IMF, a contribution that Osborne is not proposing to fight.
But the chancellor does intend to take an aggressive position against the use of the €60bn European Financial Stability Mechanism (EFSM) for any new bailout, which the UK would have to guarantee to the tune of 13.5 per cent.
Instead, the UK’s position will be that the Eurozone-backed €440bn European Financial Stability Facility (EFSF) should pick up the tab.
However, voting on the matter by 27 EU states takes place under qualified majority, meaning London does not have a veto. And the 15 states that already contribute to the EFSF are likely to want the 12 non-Eurozone countries’ help with any further bailout costs. There are reports that instead of taking another rescue, Greece could call on the EFSF to buy its debt next year if it is still unable to borrow privately.
There were rumours Friday that Greece planned an exit from the Eurozone.