Treasury's Alexander doubts Greek exit from euro

Sunday, 6 November 2011 10:13 AM

By Alex Stevenson Follow @alex__stevenson

A Greek exit from the euro is the "least likely" scenario facing the eurozone, Danny Alexander has said - before announcing the UK could make £40 billion available to the IMF.

The chief secretary to the Treasury said that Britain had "contingency plans for all eventualities" as reports emerged of Greek prime minister George Papandreou's resignation in Athens.

The IMF is looking at ways to bolster the Greek economy which the UK would contribute to. Chancellor George Osborne has made clear that the UK could fund a country-specific rescue package, but will not prop up the euro.

Mr Alexander, Mr Osborne's second-in-command in the Treasury, pointed out "the IMF is a British invention" as he argued the advantages of an intervention.

Britain has currently made available £5 billion to the IMF, Mr Alexander revealed. He said ministers have already been empowered by parliament to increase this amount to £40 billion without a further vote being required.

"We're not actually handing over cash," Mr Alexander pointed out. "It is a promise to pay to back up the IMF's lending if things go wrong."

A YouGov poll for the Sunday Times found four out of five people thought Britain should not contribute money to be used to alleviate the eurozone debt crisis.

In Athens, Mr Papandreou has spent the weekend seeking to persuade opposition leader Antonis Samaras to join a unity government which will push through the measures agreed at last week's EU summit.

"What we need the Greek government to do is to deliver the plan that they've set out," Mr Alexander told BBC1's The Andrew Marr Show.

"The most important thing we can do is to work alongside the Americans, Chinese and others to take responsibility for the problems they have."

Mr Samaris had demanded snap elections after Mr Papandreou retreated from a proposal to hold a referendum over the austerity measures. He had also called for the Greek PM to resign.

Mr Alexander said it was important to note the "very strong political commitment" among eurozone members to maintain the single currency.

"One of the things we have to do is make sure the role we have is protected within that decision-making so we can continue to shape the growth agenda of Europe," he added. "That's a real British agenda for leading Europe."
 

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