Darling: 'We cannot provide Euro support'
Updated on 09 May 2010
Alastair Darling opposes plans to bailout the Euro if it exposes Britain to risk as EU leaders try to stop the Greek crisis spreading across the Eurozone.
Chancellor Alastair Darling is attending emergency talks in Brussels designed to agree a new "European stabilisation mechanism" in another desperate bid to convince world markets that the euro is a stable and credible currency.
Today's meeting follows emergency talks between the 16 Eurozone country leaders on the Greek economic crisis as world financial markets continue to batter the Euro.
One plan to stabilise the Euro would allow the European Commission to borrow on behalf of a member state in financial trouble, using the EU budget as collateral.
The other more controversial scheme would involve setting up an EU version of the International Monetary Fund, with all member states exposed to risk from national coffers if a member state defaults on loans backed by its EU partners.
The second option is opposed by the UK - but Darling needs to consult his current Tory shadow George Osborne and his Lib-Dem counterpart Vince Cable under the courtesies of hung parliament etiquette.
Darling still retains full Government powers to make decisions however with coalition negotiations still ongoing in London, he may take into account the views of both Tory and Lib-Dem shadows before playing the UK's hand at the talks in Brussels.
Darling said today while Britain wanted to see stability restored, it was up to the Euro-group countries to support the Euro.
"It is clearly in our interest that everything is done in Europe to try to stabilise the situation," he said.
"But I am very, very clear that if there is a proposal to create a stability fund for the Euro, that has got to be a matter for the euro-group countries.
"What we will not do and what we can't do is to provide support for the Euro. That has got to be for those countries that use the Euro, that are members of the Euro group."
Pressure is on the EU leaders to agree a deal by the time financial markets open tomorrow, in a bid to calm investors' panic about the single currency's survival prospects.
Ministers from the 16 Eurozone countries have already approved a £95bn bailout for Greece. However, if the Greek financial crisis spreads to other struggling debt-heavy Eurozone states such as Spain and Portugal, the fall-out would hit the EU as a whole.
The latest plan must be approved by a majority of all 27 EU countries, represented by their finance ministers.
The chairman of the Eurozone countries, Jean-Claude Juncker, insisted yesterday that there must be agreement before the end of the weekend on a new "watertight line of defence" against a further slide in the Euro's value.
