You pay £400 for new EU bailout

FAMILIES were facing the prospect of a crippling extra £400 tax bill last night as Britain prepared to pay for yet another EU bailout.

David Cameron has refused to speculate on the crisis and prospect of Britain s contribution David Cameron has refused to speculate on the crisis and prospect of Britain’s contribution

Taxpayers could be forced to stump up £6billion to help pay off the debts of struggling Portugal.

The threat of another huge handout comes on the back of the £7billion doled out to Ireland at the end of last year. There was anger at Britain’s involvement because the UK is not part of the eurozone.

But we could be forced to help because of a deal done by Alistair Darling, the Chancellor in the last Labour government. As a result Britain will have to pay its share of the European Financial ­Stability Mechanism, a measure fiercely opposed by George Osborne at the time.

Added to this will be the UK’s contribution to the International Monetary Fund.

Respected think-tank Open Europe warned that Britain’s total portion of the bill could reach £6billion if Portugal is forced to ask for a bailout.

Because of a deal done by Alistair Darling the UK could pay up to £6bn to save Portugal

Spokesman Raoul Ruparel warned: “If the entire mechanism fund has to be used to bail out peripheral economies like Portugal, Britain’s contribution would be around 5.1billion euros (£4.5billion) – and we would have to pay another 1.7billion euros (£1.5billion) through the IMF.

“That would leave British taxpayers to pick up a massive bill of 6.8billion euros – or £6billion.”

David Cameron refused to speculate on Portugal’s economic crisis and the prospect of Britain’s contribution to any bailout when he arrived at an EU summit in Brussels last night.

“It’s not right to comment and speculate on another country’s finances, and I’m not going to do that,” he said. Portugal has sparked fears that it could follow in the footsteps of Greece and Ireland in asking for an EU bailout as its economy continues to spiral downwards.

Prime Minister Jose Socrates plunged the country into further turmoil when he tried to quit on Wednesday, having failed to win parliamentary support for an austerity package designed to address the economic problems.

Pressure on Portugal’s economy intensified yesterday as the interest rate on the country’s 10-year bonds climbed to a new high of 7.91 per cent.

The Fitch rating agency downgraded the country’s credit worthiness amid the political uncertainty and growing expectations that any new government will need to go cap in hand to Brussels for a bailout.

Fitch said it cut Portugal’s sovereign credit rating to A- from A+ because of the government’s resignation after Parliament’s rejection of new debt-reduction measures.

The move is likely to worsen Portugal’s financial plight as markets back away from investing in the country.

Portugal’s borrowing costs have surged to barely sustainable levels, increasing the likelihood that it will have to ask for a rescue like Greece and Ireland did last year. Analysts estimate a bailout would amount to £80billion in total.

The threat of British taxpayers having to contribute to that sum adds ­further weight to the Daily Express crusade for the UK to withdraw from the European Union.

Matthew Sinclair, director of campaign group the TaxPayers’ Alliance, said: “British taxpayers rejected the euro and shouldn’t be asked to throw money down the drain trying to bail out that failed project.

“Paying billions to help politicians in the eurozone ignore reality is a chronic waste. They need to face up to the reality that currency union has failed. With our regular contributions to the EU budget rising rapidly too, it seems like there are cuts almost everywhere but in the cash we send abroad to wasteful and venal eurocrats.”

Tory MP Philip Hollobone said: “The whole point of Britain keeping the pound and staying out of the euro was to avoid bailing out countries such as Portugal. It’s going to cost us all a huge amount of money if we have to bail out Europe’s dodgy economies.”

There was a furious debate in the Commons yesterday with MPs urging the Government not to step in. Tory Bernard Jenkin warned that voters would be “absolutely ­furious” if public money was used to bail out Portugal. “Can we just have a reality check?” he asked. “There will be no stability in the euro area until at least some of the countries currently in it leave – and there seems to be little doubt about that.

“Can I remind you we’ve just had an austerity Budget? In my constituency they’re talking about having to make NHS savings of £84million over the present planned period.

“Can you imagine how absolutely furious British voters would be if it turns out that the British taxpayer has to continue contributing to the bailout of euro countries, even though we’re not a member?”

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