By politics.co.uk staff
An EU bailout of Greece is illegal under the Maastricht treaty, Norman Lamont said this morning, just before EU leaders decided to help.
The chief secretary of the Treasury when Britain joined the European exchange rate mechanism in 1990 said the Maastricht treaty specifically ruled out bailouts out of concerns that Italy would need help at some point.
Lord Lamont said there were three options to the country's concerns: IMF assistance, which was politically difficult because it would suggest the EU cannot keep its house in order, an EU bail-out which would be illegal, or doing nothing. The last option was never likely.
But European leaders appeared to put those concerns to one side today when they agreed to help Greece with its deficit.
EU President Herman Van Rompuy said a deal had been reached on helping Greece tackle its debt crisis but he gave no further details of any conditions which might apply.
Gordon Brown and Alistair Darling said the situation constituted "a Eurozone problem" and confirmed the UK has no plans to help with the bail-out.
"Ultimately it will be a European bailout," Lord Lamont predicted on the Today programme this morning.
"The problem is that is really illegal under the Maastricht treaty."
The Greek situation reveals what happens when you have a currency without a country, he argued.
"You've got to have a European government if you want to have a European currency," he said.
Lord Lamont was chancellor between 1990 and 1993.