Osborne's Irish deal |

Sunday 28th November 2010 | 20:18

Osborne's Irish deal

George Osborne is on his way back to Blighty after doing Britain's bit in Brussels to help the Irish economy.

The Chancellor wants us to focus mainly on the headline stat that the UK is making a £3.2 bn loan directly to our "friend in need".

The Treasury are not giving out any specific figures about the other part of the deal, namely the UK's exposure through the IMF and temporary EU bailout mechanism.

But I'm told that a simple bit of maths is needed to get the total figure. The UK's liability is 13.5% of the EU mechanism total of 22.5bn euros. Converted into sterling, that means we are underwriting a guarantee of £2.6 bn (13.5% of £19.27 bn).

Our exposure to the 22.5 bn euro IMF bit of the deal is at a rate of 4.5%. So we are underwriting a guarantee of £0.86bn for the IMF.

In total that means the UK is exposed to the tune of £3.46 bn through the IMF and EU. This liability is a very different animal from our direct loan, but if you put all the figures together you get a grand total of £6.6bn in theoretical and actual help Britain is giving to Ireland.

As we struggle with our own deficit, that's quite something.

Still, Treasury sources are delighted at Osborne's biggest triumph in Brussels. He was adamant that the UK would not take part in any future permanent EU bailout mechanism - and won the agreement of Belgian finance minister Didier Reynders, who was chairing today's crunch talks. All future bailouts will wrap in both the temporary and permanent mechanims into one beast, it seems. Britain won't be part of that new beast.

That means that even before David Cameron marches on Brussels for the EU Council next month - where he'd expected to be asked to stay in the mechanism - Osborne has spared him the trouble.

The deathbed (May 9th) EU deal bequeathed to this Coalition from Gordon Brown and Alistair Darling looks itself to be finally dead.

Leave a comment...

matt

21:19 |
28 Nov 2010
Recommended
1

Viva la Coalition!

Boudicca

12:16 |
29 Nov 2010
0

Adamant that the UK wouldn't take part in any future permanent EU bailout mechanism ..... I think that should be taken with a huge pince of salt and the devil is in the detail. "Future permanent bailout mechanism" is not needed - Darling has already signed our Agreement and Cameron won't repeal it.

Alex Ross

12:09 |
30 Nov 2010
0

You sorting out an RSS feed for this any time soon Paul??

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