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Chair of the European Parliament's Economic and Monetary Affairs Committee, Sharon Bowles MEP, comments on the Irish rescue fund

November 23, 2010 2:00 PM

The Irish rescue fund, which amounts to €90 billion (£70 billion) over three years, has been agreed. Approximately half the fund will come from the EU and the other half will come from the International Monetary Fund (IMF).

Cash for the rescue fund will come from four specified sources:

• The EU's Financial Stability Mechanism - a pot of money totalling €80 billion. Originally a smaller fund set up to help non-Eurozone Members of the EU; this was extended to the Eurozone as well and increased to its present level earlier this year. Theoretically the UK can benefit and has always contributed.

• The EU's Financial Stability Facility - a pot of money totalling €440 billion and originally set up to help the 16 countries in the Eurozone (the UK does not contribute to this pot).

• A £225 billion facility from the International Monetary Fund (as a member of the IMF the UK contributes to this pot).

• Large direct loans from the UK (and other non-Eurozone countries such as Sweden) to Ireland.

The UK's total share of the Irish rescue fund is estimated at approximately £10 billion.

Sharon Bowles MEP said:

"We are all trying to find out how much of the money comes from which pot. It would be unfair to run dry the EU's Financial Stability Mechanism as this would leave nothing to help non-Eurozone countries.

"That said, the UK is right to stand by Ireland because economically (and geographically), our two nations are attached and so it is in our interest.

"We are all in this together and I believe it is helpful that the UK is also showing the EU that when the going gets tough, the UK does its bit to help.

"The English poet John Donne believed that we are all connected. He wrote: 'No man is an island entire of itself; every man is a piece of the continent, a part of the main; if a clod be washed away by the sea, Europe is the less'. Given the current situation, I couldn't agree more.

"Eurosceptics must also note that the interest the UK will receive from bilateral loans to Ireland is more than the cost of raising the money."

ENDS