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Britain's euro bailout stance 'unrealistic': Borg

AFP/The Local · 11 May 2010, 07:39

Published: 11 May 2010 07:39 GMT+02:00

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"It is completely unrealistic to think one cannot help" by contributing to the stability fund, Borg told reporters in Stockholm upon returning from Brussels, where EU finance ministers agreed to the €750 billion plan.

"I think it is unrealistic to imagine that Britain won't take part" in the plan, he added.

"London is Europe's financial center. If bank financing and payments no longer work, it will only take a few days before the financial markets in London are dramatically affected," Borg said.

British finance minister Alistair Darling said Sunday that Britain could not and would not support a European Union bailout fund to help struggling eurozone economies.

"What we will not do and what we can't do is provide support for the euro... The responsibility for supporting the euro must be for the Eurogroup members," Darling told Sky News television in Brussels.

But Sweden, which is also an EU member outside of the eurozone, would not rule out helping to underwrite an EU plan, Borg said in Brussels Sunday, adding he "would be willing to consider any option."

On Monday, Borg justified his position by explaining a European financial crisis would send Swedish exports tumbling.

"If a liquidity crisis affects the banking system, if banks have liquidity problems, it can hit exports to the point of bringing them to a standstill, and it's completely impossible for an export-dependent country like Sweden to function in such a situation," he said.

Sweden would participate in the stability fund through the €60 billion-envelope supplied by European Commission coffers, Borg said.

Swedish Prime Minister Fredrik Reinfeldt meanwhile called the international intervention, which in total runs to more than €750 billion, "a very strong message."

Story continues below…

"It is mainly the eurozone that will bear this responsibility. We will see how this affects Sweden, but as long as it is done in line with market conditions, the bill will not be sent to taxpayers. That is important to point out," he said.

Global stock markets and the euro rocketed on Monday after the EU and IMF agreed the unprecedented rescue package for the eurozone, staunching a crisis

that threatened to derail global economic recovery.

AFP/The Local (news@thelocal.se)

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Your comments about this article

08:51 May 11, 2010 by karex
I just hope that a bailout will be carried out with substancial strings attached. Handing out money to countries like Greece is equivalent to financing a drug addict. Measures must be taken to assure that the money will not be squandered and they must be aware that they cannot continue their wasteful existence. Otherwise it's just a matter of time before the next bailout.
09:13 May 11, 2010 by voiceofreason
The Greeks dodge taxes, why should my own hard-earned money go towards paying for their debts.

It is fiscally irresponsible to expect U.K. to come to the aid of Greece when they have problems of their own to deal with. Love your neighbors but not more than yourself :).
09:42 May 11, 2010 by BCR
Oh no liquidity problems! I am so scared that it has me reaching for my cheque book already.

Karex-> Surely the implications "re-financing of a financially irresponsible government, country or person would apply to the banks too?"

Additionally, just because the politicians in Sweden (will Sweden's measly contribution really make a difference?). I'm convinced it is just another example of the Swedish governments over inflated ego at work. The only area in which Sweden's government makes a real difference on the world stage is by their continued subsidies to the Swedish Arms Industry.

This is Greece and Germany's problem right now.
10:06 May 11, 2010 by Zoolander428
"... the bill will not be sent to taxpayers. That is important to point out."

Ok - so how exactly does any government expect to spend anything, without collecting from the taxpayers, or borrowing from future tax payers?

Anytime the government spends money, the taxpayers are stuck with the bill in some form.
10:15 May 11, 2010 by EtoileBrilliant
Hello Mr. Borg. I don't know whether you've noticed but we've got our own set of problems to deal with- like no government in place. For any politician to sign up for the bailout package this week, would be a suicide note.

On a separate note, more fool you Mr. Borg throwing good money after bad. The rescue package has just turned a Southern European liquidity crisis into a fully blown Eurozone solvency crisis. The Euro is already trading at Friday's 1.27 level, in other words $1 trillion dollars buys you nothing except a 15% rise in bank shares.

If Vattenfall didn't lace apathy into Sweden's water supply, they'd be a case for a riot or two down at the Riksdag complaining about Borg's generosity with tax payers' money
10:41 May 11, 2010 by summo
As much as it pains me to support the lazy Greeks, the cowboys of Europe, without backing they would have collapsed, the markets would have lost faith in the EU in general. Spain and Portugal would have had a liquidity crisis and a recession far bigger than the previous one would have swept over Europe within weeks.

You only have to look how the markets reacted yesterday at the news, stability equals growth and that is what ever nation needs right now, Some more than others.

The UK would loose £44Bn if they went under in Banking related loans already committed, not a small amount when things are already tight. Plus, to promise to support the EU cost nothing other than words initially.
10:54 May 11, 2010 by EtoileBrilliant
Summo, I sympathize with your viewpoint but the market will still collapse just in a much bigger way. Yesterday was nothing to do with bailing out Greece (they will need an austerity package come what may), this was about bailing out a group of banks who kept on rolling over their Greek exposure with ever increasing coupon rates.

As Rick Santelli said yesterday CNBC. "There is no plan B. That was A, B, C & D rolled into one". The Euro members should have been swifter, yes. But they should have let Greece default and restructure a long time ago.

Read David Roche's (FT) analysis and you'll realize that if you were wise you sold into yesterday's relief rally.

12:15 May 11, 2010 by Kevin Harris
Don't give the Greeks, Spanish or Portuguese anything. Let them go bankrupt, let the markets collapse. All the Europeans posting here have governments that allowed this to happen. Our governments invited these countries into the EU, and we were warned then. We ignored the warnings and have been turning a blind eye ever since. We even enthusiastically celebrated a Greek Olympics paid for on borrowed money our politicians knew then would not be repaid. The electorates of the Greece, Spain, Portugal, and any others that run out of options, will just have to live in poverty for years. It serves them right for electing such buffoons. Responsible EU countries will suffer too, it serves them/us/me right for inviting them into the EU. We are all responsible and we should all pay to put it right, and learn more about the risk of lending money to reckless fools. We should not avoid our responsibilities with a bail out of borrowed money, which our children and grandchildren will have to repay. That easy option will only encourage Europeans to elect another bunch of buffoons and we will be back here again in 25 years time.
12:24 May 11, 2010 by hardonforswedes
@kevin harris I fully agree with you, but I think that the UK and Ireland should be included in the group too as they are as equally as bad
12:47 May 11, 2010 by Audrian
If Greece is left to its devise what happens: (1) unemployment will rise to say 20 to 30% of the population. It can cause an upheaval in that country with unknown consequence in the rest of Europe particularly if a revolutionary governments takes power. (2) French German and British investors (rich people of these countries) will loose billions of dollars if Greece is allowed to default with debt payments.

The world financial system is arranged such that the capitalist make money at all time, good and bad times.
12:50 May 11, 2010 by karex

Yes this does include the banks, as well as the above-mentioned countries. I would even go as far as throwing Italy in that bunch. I just mentioned Greece because it is in the spotlight right now.
12:57 May 11, 2010 by Kronaboy
Last time I looked UK was in even bigger trouble than Greece, I would have thought it would have been obvious the UK is looking at benefiting from this scheme not contributing?
17:01 May 11, 2010 by zircon
I hear you, I hear you, Mr Borg. PM Reinfeldt is worried whether Sweden will suffer a surplus of exports in the future.
23:31 May 11, 2010 by Luke35711
And I announce a bailout of 1 trillion billion gigazillions of galactic dollars for the Martian economy. It's the same thing.

There is no money!

There is no economy!

I am no leader.
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