UK may play role in Ireland bailout

The fact Ireland remains one of Britain's largest export markets despite efforts to woo the big emerging economies may draw the…

The fact Ireland remains one of Britain's largest export markets despite efforts to woo the big emerging economies may draw the British into efforts to prop up the Irish economy.

British finance minister George Osborne has so far offered only verbal support for Ireland, but the Financial Times reported today there were signs that Britain was considering providing its own direct loans as part of an aid package.

"Ireland is our closest neighbour and it's in Britain's national interest that the Irish economy is successful and we have a stable banking system," Mr Osborne said ahead of a meeting of European Union finance ministers in Brussels.

"So Britain stands ready to support Ireland in the steps that it needs to take to bring about that stability," he added.

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Britain is not part of the euro zone but could be asked to contribute some £6 billion (€ ) under the European Financial Stabilisation Mechanism, leaving aside any bilateral aid.

A Treasury spokesman said Ireland has yet to ask for help and declined to comment on speculation about how Britain might get involved.

Prime Minister David Cameron has led trade delegations to China and India this year, but British trade with Ireland is still greater than its business with the huge BRIC emerging economies - Brazil, Russia, India and China - combined.

British retailers such as Tesco and Marks & Spencer have a high-profile presence in Dublin, and Ireland is also a crucial market for goods produced in Northern Ireland - which is trying to wean itself off reliance on the British public sector for employment.

"The overall exposure to the Irish economy is by no means trivial, it's something which is relevant to concern about financial stability in the UK," Bank of England Governor Mervyn King said this week.

Reuters