European leaders are edging towards an astonishing new £600billion bail-out in a hysterical attempt to save the flailing euro, it has emerged.
German Chancellor Angela Merkel is believed to have finally bowed to pressure to grant her country’s economic firepower to be used to back the single currency.
Under the scheme,the European Union’s multi-billion-pound rescue funds will be used to buy up the debts of Spain and various other euro zone countries that are in a critical financial mess.
Brussels officials consider the move is a vital innovation in the despairing search for the “big bazooka” to end frantic market hypothesis over the euro’s future.
The move which came to light at the G20 Summit in the Mexican resort of Los Cabos is assumed to be seen as a victory for David Cameron because British taxpayers will be spared from contributing to the bailout.
But Eurosceptics are already condemning it as merely a “sticking plaster” that will subsequently fail to save the single currency.
Tory MP Douglas Carswell said:“This arrangement sounds like the German taxpayer assuming the euro zone’s debts. It means more debt and more recession.“It is a sticking plaster.
I cannot believe that Margaret Thatcher would have gone along with something like this and I cannot understand why our Prime Minister is doing so.”
Euro zone leaders are expected to officially announce the massive new bailout deal within days.It will permit finance from the EU’s two rescue funds,the European Financial Stability Facility and the European Financial Stabilisation Mechanism,to be used to purchase government bonds from debt ridden euro zone nations.
Around £600billion is left in the two funds, soon to be amalgamated,after former bailouts to Ireland,Portugal and Greece.The arrangement will also lift the restriction on the Frankfurt-based European Central Bank buying euro zone debt.
Chancellor George Osborne,said:“I think one thing we have learnt is don’t expect a single summit to solve the euro zone’s problems, otherwise you are going to be disappointed.
“I am not claiming that this summit has solved those problems,but the euro zone is inching towards solutions.”
Mr Osborne added:“Basically,we do need to see the richer countries,like Germany,like Holland,spend some of their resource in propping up the weaker countries of the euro zone.
“There are signs that the euro zone are moving towards richer countries standing behind their banks and standing behind the weaker countries.“It’s a reminder of why we are not in the euro because I think British taxpayers would find these things difficult to stomach.
But British taxpayers need to see the euro zone sort their act out if we are going to get sustainable growth and jobs.”
Mrs Merkel is likely to face vehement repercussions from German voters faced with picking up the bill if the deal goes ahead.
She is only thought to have succumbed to the deal following acute pressure from US President Barack Obama.
World leaders are understood to have quarrelled over the crisis in a series of rows at the summit which has been widely interpreted as an absurd “jolly” as some politicians were entertained by trapeze artists and fireworks as they squabbled over dinner!
They squabbled over dinner,imagine if they had something more important to discuss!