Page last updated at 10:21 GMT, Monday, 10 May 2010 11:21 UK

Alistair Darling - UK euro support liability '8bn'

Alistair Darling: ''It is a good deal for Europe, including us''

The UK's liability as part of a 750bn euro (£650bn) guarantee scheme to support the euro is "about £8bn", Chancellor Alistair Darling has said.

However, Mr Darling insisted his actions had "minimised" the risk to Britain and that strict loan conditions made default by other nations unlikely.

EU finance ministers agreed the deal to stop the Greek debt crisis spreading.

The 16 eurozone nations can now access 440bn euros of loan guarantees and 60bn euros of European Commission funding.

The International Monetary Fund (IMF) will also contribute up to 250bn euros.

The UK, which not part of the eurozone, is contributing to the emergency package via contributions to the EC and IMF parts of the package.

Mr Darling told BBC Breakfast: "It is a good deal for Europe and we have minimised our exposure and that is a very, very important feature of what I managed to agree last night."

If we didn't do it, the risk is the countries would go down and there would be a far greater loss on us.
Alistair Darling

The Labour chancellor, who remains in post during negotiations over the formation of a new government, said Britain would contribute less than countries using the euro.

"There is about 440bn euros which the eurozone countries have put together. That is their responsibility - we are not involved in that," he said.

The emergency package Britain has contributed to would be available to any of the 27 member states that had got into difficulties.

It means that if a country defaults on its loan, the UK may have to contribute extra payments to the EU budget.

"If there was a 100% default - and remember all these loans are made with strict IMF conditions and strict European Union conditions - then our exposure would be about £8bn," said Mr Darling.

He said most countries in the world were members of the IMF, which lends money to countries in difficulties.

'Stringent conditions'

"The good thing about it is that it comes with very stringent conditions so countries generally don't default.

"Therefore this is actually quite a good insurance scheme for us. Put another way - if we didn't do it, the risk is the countries would go down and there would be a far greater loss on us."

Mr Darling said he had spoken to shadow chancellor George Osborne and Liberal Democrat counterpart Vince Cable about the situation. but would not say how they had reacted.

The whole deal, coupled with the aid package specifically for Greece, was calculated to convince speculators that the euro crisis was contained and that it will not spread to other struggling single currency countries such as Spain and Portugal.

Global stock markets surged after news broke that the package had been agreed.



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