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Dublin: 6 °C Saturday 29 November, 2014

UK and Sweden offer over €9bn in bailout loans

George Osborne says the UK is ready to offer ‘around’ £7bn, while Sweden is ready to pledge $1.5bn, in bilateral aid.

British chancellor George Osborne leaves the BBC's Millbank Studios this morning after revealing that the UK had offered Ireland a £7bn loan.
British chancellor George Osborne leaves the BBC's Millbank Studios this morning after revealing that the UK had offered Ireland a £7bn loan.
Image: Tim Ireland/PA Wire

THE FINANCE MINISTERS of some of Europe’s leading non-Eurozone economies have said they are ready to offer Ireland bilateral loans of over €9bn between them, in order to further assist Ireland’s management of its banking sector.

Britain’s Chancellor of the Exchequer, George Osborne, this morning told BBC Radio 4′s Today programme that the UK had “made a commitment to consider a bilateral loan that reflects the fact we are not part of the euro and don’t want to be part of the euro.

“Ireland is our very closest economic neighbour. I judged it to be in our national interest to be part of the international efforts to help the Irish,” he  told presenter Evan Davis.

Asked to confirm media speculation from last night that the UK’s potential loan could be to the tune of £7 billion (€8.18bn), Osborne amount would be “around that”, adding:

It’s in the billions, not the tens of billions. But the details of the entire package – not just the UK contribution, but the Eurozone contribution, the IMF contribution, is being worked out as we speak. We should, at the end of the month, have the details on that. [...]

Ireland is a friend in need, and we’re here to help.

Listen to Osborne discuss the Irish situation >

Osborne refused to indicate what kind of interest rate might be charged as part of the loan, but said it would be quite close to the rate being charged of Ireland to draw down funds from the EU and IMF contingency package.

Britain’s move was also geared to manage the exposure of British banks to Irish liabilities, Osborne added; the fact that Bank of Ireland issued sterling notes in Northern Ireland was proof of how intertwined the two economies were.

More Eurosceptic members of the Conservative Party, however, have told the Daily Telegraph they fear the government is becoming embroiled in a situation that could become more and more expensive.

Sweden, meanwhile, has also said it was willing to offer up to €1.1bn in a bilateral loan of its own, with a prospective interest rate of 3%.

The country’s finance minister Anders Borg told radio in his own country that a loan between 5 and 10 billion Swedish crowns was being considered, though such a loan would need to win the support of parliament.

The amount, he said, would similar to loans given to Iceland and Latvia on previous instances. Sweden joined with Denmark, Norway and Finland in providing a €1.8bn loan to Iceland when it suffered its own banking crisis.

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