Mats Persson

Britain may not be able to avoid bailing out the Irish

This morning, it sounds as though Ireland has finally buckled to demands that they accept a bailout from the EU. Their central bank governor, Patrick Honohan, has said that he expects a “very substantal loan” from Europe – although the details, and debtees, are yet to be clarified.

In the UK, of course, backbench MPs and others have been quick to condemn any move which would force British taxpayers to cough up cash under the EU’s various bail-out arrangements. Only problem is: the UK may not have a choice. The part of the eurozone bail-out package which Britain could be underwriting to the tune of £6-7 billion – the so-called European Financial Stability Mechanism – is not protected by a UK veto. This means that the mechanism can be triggered by a majority vote amongst EU ministers, and that the UK could be outvoted.

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