George Osborne: UK 'considering all options for crisis aid to Ireland'

Published on Wednesday 17 November 2010 17:01

THE Treasury is considering all options for financial aid to Ireland, the Chancellor, George Osborne, said yesterday.

But he refused to speculate on whether the UK was on the brink of announcing bilateral loans, or making a contribution to an EU bailout package.

He was speaking after talks in Brussels with his EU counterparts, at which Ireland's finance minister, Brian Lenihan, repeated Dublin's rejection so far of a bailout offer from the member states.

"We (the UK] are going to do what we regard as being in the British national interest: Ireland is our closest neighbour, so it is in our national interest that the Irish economy is successful and that the Irish banking system is stable," Mr Osborne said.

"Britain stands ready to support Ireland on the steps it needs to take to bring about that stability," he added. "I won't speculate on what kind of assistance we might provide.

"There are options, and we are looking at all of those.

"But remember, the Irish have not requested assistance, and these are precautionary discussions. We (the EU] are having perfectly sensible, precautionary discussions about what happens if Ireland sought assistance."

But most EU governments now believe Ireland will take advantage of a bailout - probably not before the government has unveiled a four-year economic recovery programme, expected to be published next week.

The fact that Ireland agreed on Tuesday night to open its books to a team of EU, European Central Bank and International Monetary Fund (IMF) experts reinforced the view that a multi-billion-pound bailout is on the cards, sooner rather than later.

IMF staff were expected in Dublin last night to start work on what EU economics and monetary affairs commissioner Olli Rehn called "an intensification of preparations of a potential programme in case it is requested and in case it is necessary".

Yesterday, Mr Osborne had talks with Mr Lenihan, saying afterwards: "I have expressed my support for him and the tough job he has got on his hands."

On Tuesday night, after a separate meeting of the 16 finance ministers from the single currency countries, a statement said: "The eurogroup welcomes the significant efforts of Ireland to deal with the challenges it faces."