5th April 2011
It now seems inevitable that Portugal will follow in the footsteps of both Greece and Ireland and need bailing out by the European taxpayer. Any bailout should not involve British money.
In Ireland’s case we were compelled to help because it was clear that British interests and investments were at stake. This is not the case in Portugal's situation which has come about largely because of its government's poor fiscal and economic policies, rather than a banking crisis.
During the last decade Portugal was an anomaly with its economy stagnating whilst others grew. If we put money into the pot without them undertaking the necessary economic reform then we will be throwing good money after bad. This is a Eurozone problem and requires a Eurozone solution.
I am deeply concerned about the legality of the EU’s intervention which stems from Article 122 of the Treaty. This was meant to provide assistance to a member state in the event of a natural disaster. The problems affecting Portugal are entirely man made. The use of this Article has been described by France's finance minister as "a major transgression of the Treaty".
It is worth noting that the European Financial Stability Fund already has enough money to cover the estimated €60-€70 billion cost of bailing out Portugal. British money isn't needed.
At some point we need to draw a line and stop bailing out other countries. For me, this starts with Portugal.