The UK Chancellor George Osborne has told the meeting of European finance ministers on Tuesday that Britain is not prepared to join in the Greek bailout, as it is not a member of the Eurozone. He said:
"Britain is not in the euro, so the idea that British taxpayers will be on the line for this Greek deal is a complete non-starter. The Eurozone needs to foot its own bill."
The European Financial Stabilisation Mechanism (EFSM) was an emergency fund created in May 2010 with guarantees from all EU 28 member states and used to bail out Ireland and Portugal. However, in 2012 it was combined with the European Financial Stability Facility (EFSF) to create the European Stability Mechanism (ESM), the body that will provide the third Greek bailout.
GUARDIAN: #Greece crisis:Osborne seeks to block use of British-backed fund in bailout http://t.co/TSRLV2vLC3 #Grecia pic.twitter.com/0gwbT7JayU
— Gonzalo Semprún (@gsemprunmdg) July 14, 2015
Reports began circulating on Monday that the European Commission President, Jean-Claude Juncker, was considering reviving the EFSM fund to use as collateral against short-term loans to Greece.
An EU official confirmed to reporters that $14.3 billion remained in the EFSM fund and that $2-3 billion could be used for the Greek bailout. All 28 EU governments would have to give their consent to allow remaining funds in the EFSM to be used, because the fund is backed by the whole EU budget.
Osborne on Greece: "If the country is not in control of borrowing, the borrowing takes control of the country”.Erm.. pic.twitter.com/EA9eQXC8kg
— Fraser Nelson (@FraserNelson) July 8, 2015
In London, a treasury official was quoted as saying: "Our Eurozone colleagues have received the message loud and clear that it would not be acceptable for this issue of British support for Eurozone bailouts to be revisited."
Poland, Czech Republic Back British Block
Britain is not alone in its refusal to help. Prague expressed a similar unwillingness to contribute.
"The Czech Republic will not give any loan to Greece, nor does it want to guarantee any loans for Greece," Czech Finance Minister Andrej Babis said.
Diplomatic sources said on Monday that Poland would also oppose the use of EFSM to provide emergency cash for Greece.
EU officials had already made clear this week that they did not expect Britain to contribute to Greece and that Brussels would not press it to. That is not least because the EU executive is trying to avoid fueling Eurosceptic sentiment in the bloc's second-biggest economy before a referendum that Prime Minister David Cameron has called on EU membership by 2017.
