British chancellor confirms multi-billion-dollar loan offer to Ireland

10:22, November 23, 2010      

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British Chancellor of the Exchequer George Osborne said on Monday that Britain has offered a direct loan to Ireland worth billions of pounds to help the latter cope with its debt crisis, which threatens the country's financial credibility.

Osborne said: "What we have committed to do is to be partners, as shareholders in the IMF, in the rescue of the Irish economy, but we have also made a commitment to consider a bilateral loan. That reflects that we are not part of the euro, and don't want to be part of the euro, but Ireland is our very closest economic neighbor, so I judged it to be in our very best economic interests to be part of the international efforts to help the Irish."

Osborne said in a radio interview with the BBC, that there would be a separate, bilateral British loan, and that the total loan from Britain would be around 7 billion pounds (about 11.2 billion U.S. dollars).

He said: "It's around that -- it's in the billions, not the tens of billions, but the details of the entire package, not just the British contribution but the eurozone contribution and the IMF contribution is being worked out as we speak and we should by the end of the month have the details of that."

When asked about the details of the British loan, such as interest rates, Osborne said he imagined they would be very close to the IMF details but he did not want to make a commitment yet.

Ireland applied to the eurozone nations over the weekend for a multi-billion dollar emergency rescue package, to safeguard the Irish financial system which is faced with high debts.

The commitment has already caused a political row within the coalition government, formed by Osborne's right-wing Conservative party and the left-of-center Liberal Democrats. Osborne was criticized by right-wing Conservatives for helping to bail out the euro, because Britain is not a member. Critics said that Britain should instead aid Ireland to leave the euro.

Osborne defended his decision to extend a loan: "It's in our national interests to help Ireland and the reason why it is a bilateral contribution is precisely to recognize there is a particular economic relationship between Britain and Ireland."

He added: "It would not have been in Britain's national interest if Britain had not been part of the package put together by the international community to help our closest neighbor. Ireland is a friend in need, and we are here to help."

He also pointed to the Irish financial crisis to justify the coalition government's swift move in its first six months toward a deep austerity budget that will take 81 billion pounds (about 129. 3 billion dollars) off government spending over the next four years.

Osborne said: "It is precisely because of the actions the British government has taken over the past six months that we have moved Britain out of the danger zone and that we are part of international rescue efforts rather than the recipients of rescue efforts."

Source: Xinhua


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