Britain's euro bailout stance 'unrealistic': Borg

AFP/The Local
AFP/The Local - [email protected]

Sweden's Finance Minister Anders Borg argued on Monday that the UK has a clear self-interest in helping to back the European Union bailout fund as London would be hit hard by a bank financing failure.


"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."

"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.


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