New Euro Crisis As Ireland And Portugal Plunge Deep Into Chaos

FRESH fears that British taxpayers will be forced to pay billions of pounds more cash into European Union emergency rescue schemes were raised last night after the euro crisis deepened.

Ireland’s fragile banking sector pleaded for an extra £21billion to stave off collapse yesterday while debt-stricken Portugal came under further pressure to accept a massive EU bailout.

The double blow to the troubled eurozone raised concern that the UK will have to pay more under a controversial agreement to protect the troubled currency.

Critics last night demanded that Britain refuse to pay any more into shoring up struggling eurozone economies.

The backlash followed anger earlier this year at the coalition’s decision to pour more than £6billion into a series of loans to the Irish government at a time when drastic cuts are being made to public services in the UK. Senior Tory backbencher Bill Cash said: “There will be very serious discontent and anger if we are faced with having to contribute to a Portuguese bailout or provide more money for Ireland.”

Martin Callanan, leader of the Tory Euro-MPs in Brussels, said: “Any steps to force the UK to join in by handing over money through the euro Financial Stability Mechanism should be challenged politically, and if necessary legally as well.”

Campaigners for an in-or-out referendum on Britain’s EU membership last night seized on the bailout threat as the latest evidence of the need for British voters to get a say on the country’s future.

Mark Seddon, of the People’s Pledge campaign for an EU referendum, said: “Some of us warned at the time that it would be a huge mistake for Britain to join the single currency. Since we didn’t make that mistake, why should we pay for the mistakes of other countries? Especially as last year Britain paid a record £9.2billion in contributions to the EU.”

The plea from Irish banks for cash followed a series of tests by the Republic’s new government on the banking sector’s ability to lend.

A £62billion EU rescue loan package was agreed last year to support the crisis-hit Irish economy, with about 10 per cent coming from the UK.

Experts yesterday claimed the £21billion requested by banks to help increase lending stocks would come from existing commitments rather than a new EU rescue. But new concerns about Portugal triggered fears the eurozone could slip back into crisis.

New figures yesterday showed the Portuguese government’s borrowing deficit hit 8.9 per cent of economic output last year rather than its target of 7.3 per cent.

The news follows the resignation last week of Portuguese Prime Minister Jose Socrates after MPs rejected his austerity plan.

Saturday April 2 2011 by Macer Hall, Political Editor

Source: The Express

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