Courtesy of Mish.
In 2010, Jean-Claude Juncker, current European Commissioner president, made a pledge to UK Prime minister David Cameron, to never again use the ESM to bail out another eurozone country.
Cameron’s concern was that he did not want to put British taxpayers at risk for eurozone sponsored bailouts.
To the shock of Cameron, the ESM came back into play in the latest Greek bailout deal.
Did Cameron not know that Juncker was a confirmed and self-proclaimed liar? I think not, so any shock display must be fake, for political show only.
British Taxpayers Protected
To smooth over UK concerns, Chancellor of the Exchequer, George Osborne, worked out an ESM Arrangement to Protect UK Taxpayers, but political damage and mistrust lingers.
British taxpayers will not be left exposed for another Greek bailout, George Osborne hopes, under a compromise struck with Jean-Claude Juncker.
The Chancellor is prepared to back the European Commission president’s controversial plan to revive a mothballed bailout programme that draws in the entire EU, in exchange for guarantees that British liabilities will be underwritten to protect UK taxpayers.
Mr Juncker’s decision to tear up a binding written agreement given to Britain in 2010 that the European Financial Stability Mechanism would never again be used to rescue the Eurozone has further soured relations with David Cameron, who now doubts whether he is able to trust him.
“Of course you can’t trust Juncker. That is why he [Cameron] didn’t vote for him,” a source close to the Prime Minister said. Mr Cameron today endorsed an explosive call from the International Monetary Fund for Greek debt reflief.
Mr Osborne had furiously denounced Mr Juncker’s plan to revive the EFSM, which uses the EU budget as collateral on cash raised on the open market, to provide up to 7 billion euros in bridging loans to Greece to stave off collapse as it is hit with 12 billion euros of debt repayments in the coming weeks. Leaving British taxpayers exposed was a “non-starter,” he said on Tuesday. “The euro zone needs to foot its own bill.”
Under a compromise backed by the Commission, the EFSM rescue package still go ahead. But Britain’s £690 million in liabilities, as well of those of other non-eurozone states, will be insured using Greek funds known as SMP profits held by the European Central Bank….
