Douglas Carswell's Blog

Finns bailing on bailout could leave Britain the bill

Imagine if non-Euro Britain was now required to contribute more to the Euro bailout than countries who joined it.  Fantasy?  Not if the True Finn party join the new Finnish government and get their way.

There are at present two distinct Euro bailout funds –  the much bigger European Financial Stability Fund, which only involves Euro members, and the smaller European Financial Stabilisation Mechanism, which involves all EU members - including Britain. 

If the Finns were to veto any further contribution to the bailouts, their “no” is most likely to manifest itself as a thumbs down for the Stability Fund, which needs unanimity from all Eurozone members.   And if the Stability Fund is no longer going to shoulder the debts of Portugal and the others, guess which bailout fund would then be further drawn upon?

Yes, folks, the Stabilisation Mechanism - which includes Britain.  It's subject to Qualified Majority Voting, may not even need any further Commons vote, and would suit a number of countries keen to see the UK shoulder more of the burden. 

Having decided not to join the Euro, British householders find that themselves shouldering the debts of Euroland.  Now we may be about to discover that we're contributing more to prop up the Euro than those countries that choose to join.  

The government must repudiate now the Stabilisation Mechanism on the grounds it is illegal under the European treaty. We should then make it clear we will, if need be, withhold our portion of the EU budget contribution used to underwrite the system – and prepare to fight it through the courts.

Of course, the counter argument will be that even if it was the outgoing Chancellor, Alistair Darling, who signed us up to the Stabilisation Mechanism at the May 9th Ecofin meeting last year, the incoming Chancellor, George Osborne, did not apparently seek to undo it at the Ecofin meeting a week later on May 18th.

Publishing evidence to show that we did all we could to oppose the Darling deal on the Stabilisation Mechanism – and that we were bounced into it - could become vital if we are to avoid far greater bailout liabilities in the months ahead.

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