Monday, 15 November 2010

Facility or mechanism?

At last it looks as though the picture is significantly clearer this morning, regarding the recent uncertainty (by some) whether the UK was or wasn't included in treaty changes within the EU.

It transpires that there are two separate bailout systems:
  • The European Financial Stabilisation Mechanism
  • The European Financial Stabilisation Facility
The first of these was agreed to by the previous (Labour) government, is still binding upon us, and would mean than we'd have to contribute some 12% of any bailout to Ireland if it should become necessary. It would probably amount to somewhere between £6 billion and £10 billion, according to different newspapers' reports. That's the EFS Mechanism.

The EFS Facility, however, applies only to those countries within the Eurozone, so doesn't affect Britain.

Well, I'm glad that's now (hopefully) cleared up!

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