Britain says Portuguese crisis justifies austerity measures
British Finance Minister George Osborne argued Thursday that Portugal's worsening debt crisis justified his painful austerity measures, saying they had saved the country from going down the same route.
“Today of all days we can see the risks that would face Britain if we were not dealing with our debts and paying off our national credit card. These risks are not imaginary — they are very, very real,” he told business leaders.
Portugal finally decided late Wednesday to request financial assistance from the European Union, paving the way for a third bailout of a eurozone country after Ireland and Greece last year.
Osborne, addressing the British Chambers of Commerce, attacked the opposition Labour party and trade unions who have said that his plans to eradicate the budget deficit by 2015 through heavy spending cuts are too harsh.
“Those in our country who deny the urgent need to deal with our deficit are playing Russian roulette with Britain’s national sovereignty,” he said.
Britain’s plans to eradicate a deficit of more than 10 percent of gross domestic product (GDP) by 2015 have been endorsed by the International Monetary Fund (IMF) and credit agencies but they have caused huge opposition at home.
Last month, more than 250,000 people marched in union-organised protests against the deep cuts.
When Ireland was bailed out last year, non-eurozone member Britain offered a bilateral loan to help its neighbour but it is not planning a similar loan to Portugal, the Treasury department said.
Britain could however be required to provide a loan of up to £4.4 billion ($7.2 billion, five billion euros) as part of its contribution to any EU emergency fund, as well as part of any IMF loan to Portugal, it said.
Such a contribution would likely enrage many members of Prime Minister David Cameron’s eurosceptic Conservative party.