Portugal in bailout fever as Socrates resigns, Britain to contribute

Channel 4 News: Following Portugal‘s prime minister Jose Socrates‘s resignation after his austerity plan was rejected, analysts are predicting harsh times ahead for the country and also its EU partners, especially the UK.

That is because Socrates had warned the financial-crisis-ridden country that tough time would prevail for it if parliament rejected his austerity budget aimed to stop the country going for a ‘bailout’.

BBC News: In the UK, in the meantime, MP Bill Cash said that the UK would probably have to contribute up to 4bn EUR to bailout the country out of its severe debt situation and government sources have confirmed that the UK would indeed be bound to contribute to Portugal’s rescue under EU law.

MPs are protesting that whilst British residents are reeling from harsh austerity measures that have been imposed by the government as part of an austerity measure to reduce the country’s debt, it is not fair for the country to be forced to bailout other nations.  They are demanding that Britain should extricate itself from EU law that requires it, notwithstanding its own internal financial crisis, to provide bailout cash to other nations.

Mr. Cash said: ‘ (the EU mechanism)…involves the UK underwriting approximately 8bn euros to eurozone countries until 2013″. He is reported to be urging the government to renegotiate Britain’s position at the upcoming summit of EU leaders.

[Financial Crisis Contributor]


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