British taxpayers could be forced to pay £6bn to bail out Portugal, it emerged last night.
Every family could be liable for £300 of the costs under Brussels plans to prop up the ailing EU nation.
As the UK's oldest ally teetered on the brink of financial collapse last night, David Cameron attended an EU summit where European leaders discussed the prospect of saving it from bankruptcy.
A bailout like those for Ireland and Greece is seen as virtually inevitable after Portuguese prime minister Jose Socrates resigned on Wednesday night when opposition parties refused to back his austerity budget.
Labour chancellor Alistair Darling signed Britain up to an EU-wide bailout fund last year, which has left the UK exposed to billions of pounds in liabilities until the fund closes in 2013.
The £53bn stability fund has about £33bn left, after £20bn was sent to help Ireland. If the entire fund were used to help Portugal, Britain would be liable for £4.5bn if the Portuguese defaulted.
But Britain would also have to give another £1.5bn through the International Monetary Fund.
That would take Britain's contribution to £6bn, which amounts to £100 for every man, woman and child in Britain, according to calculations by Open Europe.
Raoul Ruparel, the think-tank's spokesman, said: 'If the entire mechanism fund has to be used to bail out peripheral economies like Portugal, Britain's contribution would be around €5.1bn - and we would have to pay another €1.7bn through the IMF.
'That would leave British taxpayers to pick up a massive bill of €6.8bn - or £6bn.'
The fragility of Portugal's economy was confirmed by ratings agencies, which downgraded its credit rating from A-plus to A-minus because of heavy debts and high risks for creditors.
There were fears last night that Spain could be the next eurozone country to default on its debt.
Experts said a new EU bailout fund would be needed, as none of the existing packages had enough money to prop up such a large country.
Bailouts and future bailouts graph
Open Europe said that the 'perfect storm contagion' could spread to Spain if Portugal went bust.
Mr Ruparel added: 'If contagion was to spread to Spain and it came close to a default - which seems unlikely at this point - it would be the sovereign debt equivalent of [the collapse of] Lehman Brothers. Current mechanisms for dealing with the crisis fall horribly short of handling such a situation.'
Tory Eurosceptics reacted with fury to the prospect of a Portuguese bailout. Tory MP Philip Hollobone added: 'The whole point of Britain keeping the pound and staying out of the euro was to avoid bailing out countries like Portugal.'
Mr Cameron refused to comment on Britain's potential liabilities when he arrived at the summit of European leaders in Brussels yesterday. In a swipe at the eurozone, the Prime Minister declared that Europe was a 'low-growth economy'.
He added: 'As for Portugal, I don't think it would be right to comment and speculate on another country's finances and I'm not going to do that.'
But Mr Cameron's spokesman admitted there was nothing Britain could do to dodge a bailout from the existing mechanism. He said: 'It was put in place by the previous government. That mechanism still exists.'
Mr Darling signed Britain up to the bailout mechanism in the five days after Labour lost the last general election but before the Coalition was formed. He remained chancellor during that period. Incoming Chancellor George Osborne asked him not to join it, but Mr Darling went ahead.
Portugal's credit rating was slashed by Fitch, as economists warned that a bail out now looks 'inevitable'.
The frailties of neighbouring Spain were also highlighted as Moody's downgraded the debt of 30 of its banks. There are growing fears that the eurozone crisis is entering its second wave, after a period of relative calm following last year's bail outs of Greece and Ireland.
Experts predict Portugal will be forced to ask for up to €80bn (£70bn) in emergency aid.
Fitch cut its rating on Portugal's sovereign debt by two notches in the wake of the political turmoil following the resignation of its prime minister,
Fitch warned further downgrades are likely, especially if there is no 'timely and credible' programme of support from the International Monetary Fund and the European Union.
Because of the backlash among some of Europe's wealthier states over the Greek and Irish bail outs, some fear eurozone ministers may find it difficult to reach a swift agreement on Portugal.
But the currency markets seemed to be in the mood of 'selling the rumour and buying the fact' because the euro actually rose 0.7% to $1.41 in the wake of Jose Socrates' resignation.
The head of the OECD, Angel Gurria, predicted that Portugal was in for 'a rocky few weeks' and said that the political upheaval made a bail out 'more likely'.
Economists went further, with Jacques Cailloux at Royal Bank of Scotland warning 'it's pretty inevitable' that the country will need a bail out.
Spain's banking sector is also giving cause for concern. The country's growth forecasts are grim and its property market has crumbled.
{ 0 komentar... read them below or add one }
Posting Komentar