An economic bailout package for Portugal approved by EU finance ministers includes a £4.2 billion contribution from Britain.

The £67.75 billion package, subject to strict austerity measures agreed by Lisbon, is the second to commit the UK to financial guarantees which will only be called upon if Portugal defaults on the loans it raises thanks to the EU-IMF combined bailout deal.

The first package - for Ireland - is already coming under fresh scrutiny, with Dublin using talks in Brussels on Tuesday to argue for cheaper interest rates on its bailout loans.

Meanwhile, the first EU bailout package granted to Greece a year ago - with no British involvement - is also under the spotlight amid signs that the bailout system is not pulling the eurozone out of its deepening debt crisis.

Finance ministers were warned on Monday night to abandon "brutal austerity" as the answer to the debt crisis and instead give struggling countries a chance to restore collapsing economies.

The general secretary of the European Trade Union Confederation, John Monks, told the ETUC Congress in Athens that the EU-IMF arrangements were too tough to give scope for economic growth.

Mr Osborne has ruled out any UK involvement in a second Greek bailout, but could not avoid a share of the Portuguese bailout burden, as all EU countries are committed under a European Financial Stability Mechanism which runs until 2013.

http://beta.uk.news.yahoo.com/uk-gives-4-2-billion-portugal-bailout-071052205.html

where on earth is this money coming from ! , i thought the UK was already knee high in debt ! .......

We have to show willing, as we might need help ourselves one day!

Uk Gives £4.2 Billion To Portugal Bailout

UK "guarantees" not "gives".

Maybe the same thing, Naam!

where on earth is this money coming from ! , i thought the UK was already knee high in debt ! .......

The central banks prints it up out of thin air, then attaches interest to it, and finally makes the population liable for it. Ah, the advantages to having a printing press.

"The £67.75 billion package, subject to strict austerity measures agreed by Lisbon, is the second to commit the UK to financial guarantees which will only be called upon if Portugal defaults on the loans it raises thanks to the EU-IMF combined bailout deal."

where on earth is this money coming from ! , i thought the UK was already knee high in debt ! .......

It is good business, because of the dire need of the loan, it comes with high interest rates, much higher than those economies with triple A ratings.

So, as in all things those in need, are taken for everything they have by the loan sharks of big business.

I wonder what the individuals thoughts would be, if I changed the model slightly:

Single mother being threatened by thug on a sink estate, if she doesn't pay back an extortionate loan her kids will be threatened with all manor of grief.

"The £67.75 billion package, subject to strict austerity measures agreed by Lisbon, is the second to commit the UK to financial guarantees which will only be called upon if Portugal defaults on the loans it raises thanks to the EU-IMF combined bailout deal."

no matter what you write Endure or what the facts are, some people will only accept what fits into their [wishful] thinking pattern and comment accordingly. the latter applies especially to those who possess a wealth of 'no idea' and are proud to demonstrate it

where on earth is this money coming from ! , i thought the UK was already knee high in debt ! .......

It is good business, because of the dire need of the loan, it comes with high interest rates, much higher than those economies with triple A ratings.

So, as in all things those in need, are taken for everything they have by the loan sharks of big business.

I wonder what the individuals thoughts would be, if I changed the model slightly:

Single mother being threatened by thug on a sink estate, if she doesn't pay back an extortionate loan her kids will be threatened with all manor of grief.

it's only fair to mention that the "children" benefitted immensely for a decade because of the debt the "mother" accumulated fraudulently based on the benign environment the "loan sharks" provided. only now, the mother (in deep shit till the upper level of her lower lip) has asked the "loan sharks" to shell out a loan enabling her and her children to stay with mouth and nose above the upper deep shit level.

p.s. i find it quite amusing that a much below market rates loan to a debtor at the brink of insolvency who's rating is 8 (EIGHT) steps below AAA level is called "extortionate". not to mention that Portugal's rating would be much lower without the EU behind the country's back.

note to myself: "what sense does it make trying to explain the beautiful colours of a sunrise to blind people?"

Fortunately, with DSK now almost certainly out of the IMF, and a new managing director needed, we can hope thst the next appointee is not a European.

With China, SE Asia and the Arab states contributing much more to the IMF over the past few years, they want a bigger say in the policies of this organisation.

To use it as a back-up for the Euro in bailing out bankrupt southern Europe economies is not what the fund was intended for. It is a development fund and should be used as such. Let's see a non-European in charge, with a different agenda, and let these incompetent countries go to the wall. Maybe we'll be able to buy some very cheap villas then (if we've taken our money out of the banks first).

Again, this is a part of what led to the collapse of 2008. The banks lend money they don't have, by using credit documents that do not require solid, actual collateral and collect the interest on repayments in actual cash. By this means they generate income from bits of paper, later sold on to other entities as income-generating assets, and when the income doesn't materialise the whole house of cards comes falling down.

Going back further than I care to think, most countries were on the gold standard, which meant that for every pound (dollar, mark, etc) available as currency or bank deposit, there was a pound's worth of gold physically backing it. So you couldn't just print money or use these credit instruments available today. But then George Brown sold all Britain's physical gold at a quarter of it's current value. Which accounts for a lot of Britain's troubles. And he wanted to be the new IMF chief, 'til David Ca-moron told him to bog off.

It is most kind of Britain to keep bailing out other countries when they are almost bankrupt themselves. I would guess that we have that nice Tony Blair person to thank and maybe Gordon Brown. :jap:

Fortunately, with DSK now almost certainly out of the IMF, and a new managing director needed, we can hope thst the next appointee is not a European.

With China, SE Asia and the Arab states contributing much more to the IMF over the past few years, they want a bigger say in the policies of this organisation.

China contributes under 5%, add in Saudi Arabia and their total is less than 8%. None of the GCC states contribute enough to be on the list. How about letting Japan head it for a change? Only the USA kicks in more than they do.

http://en.wikipedia.org/wiki/International_Monetary_Fund

1. Fortunately, with DSK now almost certainly out of the IMF, and a new managing director needed, we can hope thst the next appointee is not a European.

2. With China, SE Asia and the Arab states contributing much more to the IMF over the past few years, they want a bigger say in the policies of this organisation.

3. To use it as a back-up for the Euro in bailing out bankrupt southern Europe economies is not what the fund was intended for. It is a development fund and should be used as such.

1. my bet is on Axel Weber, former CEO (German Bundesbank) IF he is willing (which is doubtful).

2. appointing a new MD for the IMF will cause considerable political horse trading. the Europeans will insist on the application of a decade old (unwritten) agreement that the World Bank is headed by an American and the IMF by a European.

3. IMF funds have been used, were used during the 2008 crisis and will be used in future for non-development purposes.

1. Fortunately, with DSK now almost certainly out of the IMF, and a new managing director needed, we can hope thst the next appointee is not a European.

2. With China, SE Asia and the Arab states contributing much more to the IMF over the past few years, they want a bigger say in the policies of this organisation.

3. To use it as a back-up for the Euro in bailing out bankrupt southern Europe economies is not what the fund was intended for. It is a development fund and should be used as such.

1. my bet is on Axel Weber, former CEO (German Bundesbank) IF he is willing (which is doubtful).

2. appointing a new MD for the IMF will cause considerable political horse trading. the Europeans will insist on the application of a decade old (unwritten) agreement that the World Bank is headed by an American and the IMF by a European.

3. IMF funds have been used, were used during the 2008 crisis and will be used in future for non-development purposes.

Because there's a European heading the fund.

Let others guide the IMF for a time (as Koheesti says 'What about the Japanese') and use the fund for development, not for bailing out small European states that can't (or won't) control their debt levels, but just keep borrowing more to pay back the earlier creditor.

If I did that I'd be put in jail with Bernie Madoff. It is fraud and the country should be punished for election (time and again) politicians who cannot distinguish a Ponzi scheme from sound economic judgement.

Because there's a European heading the fund.

fact: a bit over three years ago the IMF was in dire straits because there was not enough loan demand and the prevailing net income did not cover the running cost. Strauss-Kahn "economised" firing 380 employees, saving millions per month and looking for 'alternative' investments. he did not have to wait for long because...

fact: ...IMF cash was unanimously approved and used in various areas and ways to counter the Lehman 2008 effects.

fact: the members of the IMF management are political appointees and figure heads without any power to make major decisions except with the appoval of their masters and especially the Grand Master...

fact: ...the Greatest Nation on Earth™. the latter has a voting power of 16.80% which equals the combined voting power of the "runners-up" Japan, Germany and the United Kingdom, i.e. the U.S. of A. can veto any move and has in the past vetoed a number of moves.

I realise that the Europeans have more than 35% of the voting power, followed by North America and then Asia.

But this is not just about politics (or it shouldn't be).

If a fund is set up for development, why should it then be used to bail out Lehmann creditors, why should it be used to lend money to bankrupt European nations that refuse to get their affairs in order (look at the German newspapers over the past few days, with regard to Greece).

http://www.faz.net/s/Rub3ADB8A210E754E748F42960CC7349BDF/Doc~EB654D8106E914AB79E5487D7A93F9071~ATpl~Ecommon~Scontent.html

http://www.faz.net/s/Rub4D8A76D29ABA43699D9E59C0413A582C/Doc~EF0DE623E9009486E92763D821246061E~ATpl~Ecommon~Scontent.html

In the UK there is an argument at the moment regarding overseas aid. David Camoron made an election promise to devote 0.7% of GDP to overseas aid. He now says he will keep that promise and Liam Fox, among others, is opposing him.

If the contributions to the IMF are included among the items that go to make up this 0.7% of GDP, then this is not what the British people expect as 'overseas aid'. Bailing out bankrupts has caused several political storms in the UK over the past few years and is considered to be an unacceptable political doctrine for most people.

Should the UK therefore withdraw from the IMF until it gets back on track and acts as a development fund, not a quasi-bank.