The figures for the UK’s total European liability, are contained and published in a new report by the Bruges Group.
Titled The UK’s risks and exposure to the European Investment Bank and other European financial mechanisms, Bob Lyddon’s report for the Bruges Group reveals the true extent of the UK’s obligations in respect of the present and future debts of EU institutions including:
- How the Government’s defined position is questionable in law and therefore has led it to underestimate its full potential exposure to EU debt
- That the true extent of the UK’s potential exposure to the EIB, ECB and EFSM (European Financial Stabilisation Mechanism) the debt is €149.2 billion because:
- The ECB is entitled to call upon the Bank of England for up to €50 billion of the UK’s currency reserves. Under Council Regulation 1010/2000 of 8th May 2000, the ECB has the legal right to call on individual member countries’ national reserves (€50 bn in the case of the UK) should the viability of the ECB be at risk.
- The EIB can call upon up to €35.7 billion[1] from the UK, should it lose money on the loans that it has made to governments and organisations in vulnerable economies such as Greece, Portugal, Spain, Italy and Ireland.[2]
- The UK currently has a €60 billion liability to the European Financial Stabilisation Mechanism (EFSM). Solvent members are required to jointly take on the insolvent member’s debt.
- The UK’s €1.9 billion of paid-in capital to the EIB and a further €1.6 billion to the European Central Bank (lodged to pay the UK’s share of its costs) is also at risk.
