UK to commit around £7 bn to Ireland

UK to commit around 7 bn to Ireland

London: Britain plans to commit around £7 billion ($11.2 billion) to help neighbour Ireland resolve its financial crisis, finance minister George Osborne said on Monday.

Osborne said Britain planned bilateral aid to Ireland as well as honouring its international commitments, but said Britain did not want to be part of a permanent bailout mechanism for eurozone members.

The EU and IMF agreed on Sunday to help bailout Ireland with loans to tackle its banking and budget crisis in a bid to protect Europe’s financial stability.

“What we have committed to do is to obviously be partners as shareholders in the IMF in an international rescue of the Irish economy," Osborne told BBC Radio 4.

“But we have also made a commitment to consider a bilateral loan that reflects the fact we are not part of the euro ... but Ireland is our very closest economic neighbour."

Osborne was asked about reports that Britain was going to contribute around £7 billion to Ireland, a country with which it has more trade than with the emerging powers of Brazil, Russia, India and China combined.

“It’s around that (figure), it’s in the order of billions not tens of billions but the details of the entire package, not just the UK contribution, but the euro zone and IMF contribution, that is all being worked out as we speak and we should by the end of the month have the details on that."

Osborne said Britain should not have to provide further help to Ireland or any other eurozone countries that got into trouble.

“When we look at the permanent bailout mechanisms, let’s make sure Britain is not part of that, because we’re not part of the euro," he said.

Britain is cutting spending across many departments by 19% over the next four years and some critics question whether it should be bailing out other nations.

The Adam Smith Institute, a free market think-tank, described the bailout as a bad deal for Britain.

“Asking the British taxpayer to cough up £7 billion shows just how audacious the European Union has become in its desperation to keep the eurozone project afloat," said Sam Bowman, head of research at the group.

“Bailing out Ireland now would undo much of the benefits that Britain has yielded from keeping the pound and would make a mockery of the spending cuts announced by the coalition last month," he said.