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Greek exit could cost UK £4.8bn

If Greece exits the Euro, the UK could be asked to underwrite up to £4.8 billion towards a bail out for the stricken country, according to an economic think tank report.

According to Open Europe, David Cameron could also be asked to make a number of concessions, including a referendum on EU membership if a Greek exit causes a full treaty change.

Concerns are growing over the consequences of Greece leaving the Euro in the run-up to the Greek general election on 17 June.

The total cost of supporting Greece if it left the Eurozone would be anything between 67 and 259 billion Euros in short term support, in addition to longer term costs or effects on the markets.

The head of economic research at Open Europe has predicted that that new government in Athens will reach a deal with creditors to allow the country to remain in the Euro for a temporary period.

Raoul Ruparel commented: “However, as Greece approaches a balanced budget and a more stable banking sector, though still messy, an exit will look increasingly attractive.”

Taxpayers in the UK have managed to avoid any direct contributions to the bailout fund, and while the Prime Minister has won assurances that Britain will not have to contribute to a fresh Greek rescue, Open Europe have argued otherwise.

They believe that the UK would be likely to take part through the IMF, as the UK underwrites around 13% of the fund, which still contains 35 billion Euros. This would mean that British funds would be used to aid Greece.

This was posted in Bdaily's Members' News section by Ruth Mitchell .