Question to the HM Treasury:

To ask Her Majesty’s Government what is the United Kingdom’s cumulative expenditure and exposure since 2008 in relation to efforts to support the euro and the economies of Greece, Portugal and Spain; and what is the legal base for that support under the EU Treaties.

The Government recently secured agreement that Member States who are not members of the single currency, including the UK, will not incur financial liabilities as a result of any future provision of Union financial assistance for the stability of the Eurozone.

UK contingent liabilities through loans guaranteed by the EU Budget are recorded in the annual accounts of the Consolidated Fund.

The latest accounts, published on the 22 July 2015, show a UK contingent liability to loans provided to Ireland and Portugal through the European Financial Stabilisation Mechanism (EFSM) of £5,299 million. This mechanism was established under Article 122(2) of the Treaty on the Functioning of the EU.

The UK has incurred no expenditure through the provision of these EU loans. Only in the event that a recipient fails to repay a loan would the EU Budget be called upon, to which the UK contributes.

Since this report, further short-term EFSM assistance has been provided to Greece as a technical bridge finance mechanism for further euro area support from the European Stability Mechanism (ESM). However, the Government secured legally-binding collateral arrangements which ensure no liability for UK taxpayers from this loan.

The UK is not a member of the euro area and therefore has no liability to the ESM, EFSF, or Greek Loan Facility. These were used to provide assistance to Spain, Cyprus and Greece.

In 2010, recognising our close economic and financial ties, the UK provided a bilateral loan to Ireland worth €3.2 billion under the Loans to Ireland Act 2010.

As a shareholder in the International Monetary Fund (IMF), the UK has an exposure to its overall lending. The IMF is primarily a quota-based institution. The UK’s quota subscription to the IMF is 10,738.5 million Special Drawing Rights, equivalent to £10,009 million at 31 March 2015. This accounts for 4.5 per cent of total quotas at the IMF.