By Bruno Waterfield
Officials from both euro and non-euro countries said Britain should not ask for help if it runs into trouble because it had not signed up to a £378 billion support fund.
French, Swedish and many Brussels officials have predicted that it is only a matter of time before Sterling is hit by the same market turbulence that came close to destroying the euro at the weekend.
Jean-Pierre Jouyet, a former French Europe minister and the current chairman of France’s financial services authority, yesterday predicted only “God would help” a rudderless Britain after it snubbed its euro zone neighbours.
“There is not a two speed Europe but a three speed Europe. You have Europe of the euro, Europe of the countries that understand the euro … and you have the English,” he said.
“The English are very certainly going to be targeted given the political difficulties they have. Help yourself and heaven will help you. If you don’t want to show solidarity to the euro zone, then let’s see what happens to the United Kingdom.”
French bank BNP Paribas yesterday warned that the post-election fallout could lead to Britain’s losing its high creditworthiness market rating, a move that could lead to a run on the pound. The UK is running an annual debt rate even higher than Greece.
Eurozone leaders and EU finance ministers meeting in emergency session last weekend prepared the bail-out as a financial crisis threatened to spread from Greece to engulf Spain and Portugal.
But despite supporting a rapid response EU financial “mechanism” to the tune of £13 billion, Britain declined to offer another £50 billion of loan guarantees in order to help “European partners” that get into trouble.
Sweden, with a centre-Right Prime Minister, Fredrik Reinfeldt, who is a close political ally and personal friend of David Cameron, has called on Britain, a fellow non-euro country, to change its mind.
Anders Borg, Sweden’s finance minister, said his country was thinking of supporting the EU fund even though his country rejected euro membership six years ago.
“It is completely unrealistic to think one cannot,” he said. “I think it is unrealistic to imagine that Britain won’t take part. London is Europe’s financial centre. If bank financing and payments no longer work, it will only take a few days before the financial markets in London are dramatically affected.”