Britain 'can afford Irish bailout'

Britain 'can afford Irish bailout'

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Irish prime minister Brian Cowen has faced calls for the resignation of his government

The UK can afford a multi-billion bailout of the Irish economy, Chancellor George Osborne insisted as he sought to ease Tory backbench concerns over the move.

Mr Osborne has signalled that the British contribution to an international bailout package for Dublin is likely to be around £7 billion.

MPs will have a vote on a bi-lateral loan to be offered alongside a wider deal being drawn up by the European Union and the International Monetary Fund, he confirmed.

But the UK is also tied in to an EU mechanism that would leave it liable to pick up the bill if Ireland defaulted on loans guaranteed against the Brussels budget.

Mr Osborne said that was “highly unlikely” to happen but was warned by MPs of public anger at taxpayers’ cash being used to prop up a foreign economy at a time of cuts at home.

And the situation has riled Tory eurosceptics who are furious that the country is being forced to help despite not being part of the eurozone.

“This is a loan that we can afford to make and will get back,” Mr Osborne said as he made a statement to the Commons to explain the proposals.

Later, Irish Taoiseach Brian Cowen refused to bow to public and political pressure for a general election saying serving the country’s interests came above party politics.

The Taoiseach said the most important thing for Ireland was the passing of the crucial six billion euro (£5 billion) savings in Budget 2011 on December 7.

The Taoiseach confirmed however he would seek the dissolution of the Dail (parliament) when legislative actions have been taken – the passing of Budget 2011, the publication of a four-year fiscal plan and confirmation of bail-out loans from the International Monetary Fund (IMF) and Europe.

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