UK taxpayers face £1bn bill if stricken Greece leaves the euro

| August 22, 2012 | 0 Comments

By
Deputy Political Editor

18:10 EST, 21 August 2012


|

01:47 EST, 22 August 2012

British taxpayers will have to contribute to yet another bailout fund for Greece if it leaves the euro, Treasury officials have admitted.

The UK would contribute to a soft landing fund for Greece put together by the International Monetary Fund to help the country get back on its feet.

While the sums involved have yet to be worked out, it is likely to lead to a bill to the British taxpayer of more than £1billion.

Breaking apart: Greece is likely to be forced to leave the euro after two multi-million bailouts have failed to get its economy back on track

Breaking apart: Greece is likely to be forced to leave the euro after two multi-million bailouts have failed to get its economy back on track

Chancellor George Osborne believes he would be able to sell the plans to Tory backbenchers on the grounds that Greece will finally be able to devalue its currency and rebuild its economy.

Opponents of pouring British money into Greece have objected to the fact the country has been unable to float its currency because it remains locked into the rules of the euro.

Chancellor George Osborne is willing to back the soft landing fund as a collapse of the euro could lead to a 7% drop in the UK GDP

Chancellor George Osborne is willing to back the soft landing fund as a collapse of the euro could lead to a 7% drop in the UK GDP

Mr Osborne is willing to help after
seeing estimates by Treasury officials that the collapse of the euro
could lead to a catastrophic 7 per cent plunge in British economic
output.

That equates to a £100billion plunge in GDP if the single currency breaks up.

Details of the planning for a Greek exit – dubbed the Grexit in Brussels – emerged ahead of a series of crunch votes on the country’s financial crisis this week.

Greece has already had two multi-billion international bailouts from other eurozone countries and the IMF since its debt crisis broke in 2010.

But despite taking a series of harsh austerity measures that saw salaries and pensions slashed and repeated rounds of tax hikes, the country is failing to pay its way.

The government of Antonis Samaras is asking the Germans to hand over more money but Berlin is digging in its heels, leading officials to pronounce a Grexit ‘likely’ and ‘manageable’.

Eurozone boss Jean-Claude Juncker is due in Athens today, while French president Francois Hollande visits Berlin tomorrow for discussions with Chancellor Angela Merkel and will meet Mr Samaras in Paris on Saturday.

Flashpoint: Greece's financial collapse has led to demonstrations throughout the country - and recent figures show things aren't improving

Flashpoint: Greece’s financial collapse has led to demonstrations throughout the country – and recent figures show things aren’t improving

Outburst: Greeks could be back on the streets soon with the financial crisis deepening

Outburst: Greeks could be back on the streets soon with the financial crisis deepening

Downing Street and the Treasury have told the German government that they are content to see Greece kicked out of the euro – but only if Mrs Merkel and the European Central Bank immediately put in place plans to prevent the contagion spreading.

They want the ECB and the Germans to agree to eurozone-wide Eurobonds, which would allow rich countries such as Germany to underwrite the debts of ailing European nations.

Without that, there are fears of a run on the sovereign debt of Spain, Portugal and Italy, plunging the entire continent into a depression that could last a decade.

Here’s what other readers have said. Why not add your thoughts,
or debate this issue live on our message boards.

The comments below have not been moderated.

Just say NO!

And the EU disaster train keeps on rolling. Apparently we aren’t in enough debt to stop bailing out all and sundry.

A huge amount but only a fraction of that given away and wasted by Coalition and Labour governments on a regular basis.
Anything that encourages Greece and others to leave the Eurozone hell-hole should be supported.

yet again britain giving money to keep the euro from going under when greece exits the euro, when britain is not part of the euro, but then cameroon will oblige his masters

The very fact that this Euro saga has gone on for so long merely highlights the ineptitude of those that run the Euro countries, how clueless they are about what to do to sort out THEIR currency.
The main reason countries like Germany and France don’t want Greece to leave the Euro is because, if they do and then after a few years return to prosperity, other countries, like Italy and Spain, would also leave the Euro ending their whole dream!

Isn’t it a shame that we have a government with no balls to stand up to the EU and say NO MORE BAIL OUT? Harry Cheshire.

WHY?? We have never been part of the Euro so why do we have to contribute to its failure?? Cameron and Osbourne MUST SAY NO! NO! NO!!

As the EU has all these financial problems and if we stay in we have to pay 1billion here and lose 100billion there,surely we are looking at this from the wrong angle.It will be cheaper to leave than carry on with this farce.

Pay it, it could be the start of the Euro break-up, I can hear Barroso wailing from here.

How much of our money has been poured into the Euro money pit and we don’t even have the Euro? Somebody grow the b*lls to get us out of the EU at least then it’s up to us if we sink or swim.

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