The UK has confirmed that it will not be providing £25bn towards the much-heralded €200bn eurozone bailout fund, prompting speculation that the fund will shrink to around €150bn as a result. The news, which was not unexpected, came during a conference call between British Chancellor George Osborne and European colleagues.
News of Britain’s decision caused a wobble on the major European stock markets, but the real implications will play out over the course of the week as it becomes clearer whether the entire eurozone rescue package is under threat. The package was supposed to be the centrepiece of the eurozone’s attempts to save itself, but the value of that package has now dropped by 25% and could dip further.
It remains to be seen how the British decision affects the country’s position in Europe, which is already seen by many to be weakened as a result of Britain’s refusal to step into line with the other EU member states. Some believe that British Prime Minister David Cameron was right to focus on securing British interests, but others argue that he has been short-sighted and has left Britain out in the cold.