British Chancellor says UK ready to support Ireland
British chancellor George Osborne said the UK was willing to contribute to an aid package for Ireland in what would be its first financial foray into the euro area’s debt crisis.
UK banks have the biggest exposure to the Irish financial industry, making it important for Britain to support its struggling neighbour, Osborne told reporters today in Brussels, where he’s attending a meeting of European Union finance chiefs.
“It’s in Britain’s national interest that the Irish economy is successful and we have a stable banking system,” Osborne said.
“Britain stands ready to support Ireland in the steps it needs to take.”
Britain’s banks had €165bn exposure to their Irish counterparts by end of the first quarter, according to the Bank for International Settlements. Germany’s exposure was €153bn and the US’s was €85bn, BIS data showed.
The comments may stir opposition at home for Prime Minister David Cameron, who is slashing government spending to reduce the UK’s own record budget deficit.
Osborne’s remarks contrast with the UK’s decision to avoid paying into the euro-area rescue of Greece in May.
“When it comes to supporting the euro, that is for the euro-group countries,” the then chancellor, Alistair Darling, said at the time.
European finance ministers agreed late yesterday to start work on possible aid for Ireland’s debt-laden banks.
“If banking problems are too big for this small country to manage, Europe has made it clear they’ll help,” Finance Minister Brian Lenihan said in an interview with RTE today.