Molly Scott Cato does not believe the UK should fund emergency loans to Greece, saying the bailout is pointless because it doesn’t include debt relief.

The European Commission wants an EU-wide emergency fund of €12bn as part of the Greek bailout, borrowed against the EU budget, to which the UK contributes. The decision will be reached by qualified majority voting, so the UK is likely to be outvoted by Eurozone members. Molly Scott Cato MEP, who is a member of the Economics Committee in the European Parliament and was on the steering group of the No to Euro campaign a decade ago, said:

“It is heart-breaking to witness the suffering inflicted on the people of Greece through failed austerity. However, as a country we decided against joining the Euro and we shouldn’t now be required to pay for the problems arising from a bad system. The fact is, though, the UK is likely to be overruled on this through qualified majority voting. This is a clear example of the imbalance between Eurozone and non-Eurozone members and addressing this imbalance must be top of Cameron’s list as he renegotiates the terms of EU membership.”

Greens also want to see any bailout work in tandem with significant debt write-off. Dr Scott Cato has written several papers on debt relief and restructuring [1]. She concluded:

“Even the IMF has now acknowledged that Greece’s enormous debt is unsustainable and some of it must be written off. Greens have long called for a conference to address the issue of the country’s debt with restructuring and debt relief a clear outcome. Given that the IMF now supports debt relief, we need to see such a conference organised urgently.”

[1] Most recent paper: Who Owes Whom? Citizens’ Audit as a Response to the Sovereign Debt Crisis (2012)

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