http://www.dailymail.co.uk/news/article-1369767/300-family--bailing-Portugal.htmlBritish taxpayers could be forced to pay £6billion to bail out Portugal, it emerged last night.
Every family could be liable for £300 of the costs under Brussels plans to prop up the ailing EU nation.
As the UK’s oldest ally teetered on the brink of financial collapse last night, David Cameron attended an EU summit where European leaders discussed the prospect of saving it from bankruptcy.
A bailout like those for Ireland and Greece is seen as virtually inevitable after Portuguese prime minister Jose Socrates resigned on Wednesday night when opposition parties refused to back his austerity budget.
Labour chancellor Alistair Darling signed Britain up to an EU-wide bailout fund last year, which has left the UK exposed to billions of pounds in liabilities until the fund closes in 2013.
The £53billion stability fund has about £33billion left, after £20billion was sent to help Ireland.
If the entire fund were used to help Portugal, Britain would be liable for £4.5billion if the Portuguese defaulted.
But Britain would also have to give another £1.5billion through the International Monetary Fund.
That would take Britain’s contribution to £6billion, which amounts to £100 for every man, woman and child in Britain, according to calculations by Open Europe.
Raoul Ruparel, the think-tank’s spokesman, said: ‘If the entire mechanism fund has to be used to bail out peripheral economies like Portugal, Britain’s contribution would be around 5.1billion euros – and we would have to pay another 1.7billion euros through the IMF.
‘That would leave British taxpayers to pick up a massive bill of 6.8billion euros – or £6billion.’
Initially yesterday Britain’s contribution was estimated at £3billion, but this was increased later to £6billion.
The fragility of Portugal’s economy was confirmed by ratings agencies, which downgraded its credit rating from A-plus to A-minus because of heavy debts and high risks for creditors.
There were fears last night that Spain could be the next eurozone country to default on its debt.
Experts said a new EU bailout fund would be needed, as none of the existing packages had enough money to prop up such a large country.
Open Europe said that the ‘perfect storm contagion’ could spread to Spain if Portugal went bust. Mr Ruparel added: ‘If contagion was to spread to Spain and it came close to a default – which seems unlikely at this point – it would be the sovereign debt equivalent of [the collapse of] Lehman Brothers. Current mechanisms for dealing with the crisis fall horribly short of handling such a situation.’
Tory Eurosceptics reacted with fury to the prospect of a Portuguese bailout. Tory MP Philip Hollobone added: ‘The whole point of Britain keeping the pound and staying out of the euro was to avoid bailing out countries like Portugal.’
Mr Cameron refused to comment on Britain’s potential liabilities when he arrived at the summit of European leaders in Brussels yesterday afternoon. In a swipe at the eurozone, the Prime Minister declared that Europe was a ‘low-growth economy’.
The Prime Minister’s spokesman admitted there was nothing Britain could do to dodge a bailout from the existing mechanism. He said: ‘It was put in place by the previous government. That mechanism still exists.’
Mr Darling signed Britain up to the bailout mechanism in the five days after Labour lost the last general election but before the Coalition was formed. He remained chancellor during that period.
Incoming Chancellor George Osborne asked him not to join it, but Mr Darling went ahead.
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