Britain Will Stay Out Of New Greek Bailout.

Britain should not be part of any new aid package to bail out the stricken Greek economy, Chancellor George Osborne will insist today.The UK was not involved in the original 110bn euro (£96.5bn) deal approved a year ago, which was put together by the eurozone countries to help save one of their own.

The only UK commitment came from its share of an International Monetary Fund (IMF) contribution, in the form of loan guarantees.

That would only be called in if Greece defaults.

At the time that prospect was dismissed as scare-mongering.

But with the pace of Greek deficit reduction painfully slow and the economic crisis far worse than feared, a second bailout is now thought to be inevitable.

Mr Osborne is due in Luxembourg today and is expected to stress that Britain should not be



Athens has been told it must approve 28 billion euros worth of spending cuts or it will not get the next instalment of a European bailout.

Meeting in Luxembourg, eurozone finance ministers decided not to sign-off on giving Greece another 12 billion euros just yet.







Germany and France have already indicated that Britain should not need to pay a share of a repeat bailout, which is likely to be finalised within weeks.

Mr Osborne has made clear at talks in Luxembourg that the issue remains one for the eurozone alone.

Ahead of today's meeting, Chief Secretary to the Treasury Danny Alexander set out the UK argument on Sky News.

He said: "It's the eurozone that is taking forward discussions now about the next stage of dealing with Greece's substantial problems.

"There's simply no proposition on the table for the UK to contribute beyond International Monetary Fund involvement and I don't expect there to be one."

However, a bailout fund was set up by the EU after last year's Greek crisis, specifically intended to finance future economic problems in the member states, and it involves all 27 member states.

And if a majority vote to use the fund for a second Greek aid package, rather than repeat a eurozone-only rescue, the UK Treasury would be responsible for 12% of the new loan guaranteed to the Greek government.

One UK official admitted there is "theoretical risk", but no money will be involved unless Greece defaults.

Last night Greek Prime Minister George Papandreou insisted his country would not default and is determined to crack down on its mounting deficit. He said failure to do so would be a "catastrophe".

Meanwhile, Boris Johnson has said Greece should be allowed to default on its debts and leave the euro.

Writing in The Daily Telegraph, the London Mayor said the single currency is responsible for aggravating the international financial crisis.

"The euro has exacerbated the financial crisis by encouraging some countries to behave as recklessly as the banks themselves," he said.