Developments aplenty on the Portuguese front — the most noteworthy being that Britain is probably in for a €4.8 billion share of the €80 billion tab. Robert Peston explains the numbers here, although it basically comes down to the lending mechanisms that will be deployed. Add up our 13.5 per cent exposure to the European Financial Stabilisation Mechanism (EFSM) with our 4.5 per cent exposure to the IMF’s pot, and it comes to €4.8 billion. Or, rather, £4.2 billion.
The politics of the situation are precarious for the coalition. Yet I doubt they’ll be unduly troubled by Ed Balls’s suggestion that “it would be better if this was sorted out by euro area countries themselves given that this is a euro area issue”. The shadow chancellor may be echoing popular sentiment, but he is struggling against the fact that Alistair Darling signed us up to the EFSM in the first place. Even Balls will find it difficult to weaponise this issue.
But Balls isn’t really the trouble. Tory MPs and MEPs are muttering darkly about our involvement in the rescue package. And, judging by the polls, the public are with them. If the government does go ahead with help for Portugal, then it will need to explain clearly — and in some detail — what we get out of it. After Cameron’s ambiguous “victory” in Brussels last year, he’ll need some real triumphs to calm a nation that is facing enough hardship of its own.
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