By Tim Montgomerie
Follow Tim on Twitter


Library photo

In a testy interview with Sarah Montague the Chancellor conceded that the old omertà is no longer being observed and other EU states are now openly talking about the possibility of Greece leaving the single currency. He poured cold water on its desirability, however. Mr Osborne told Radio 4 listeners that it would be a better option if Greece stayed within the Eurozone and implemented last week's 'rescue' deal. A Greek exit, he warned, would "not be an easy option". It would, he said, be "pretty traumatic" and have unpredictable consequences. The UK Treasury shares the fears of other EU states that once one nation left the single currency the whole system would lose its inviolable status and might start to unravel, continuing with Italy.

Asked if Britain was playing a full part in the negotiations he said that it was for Eurozone states to stand behind their currency and that no-one else can do that for them – not China, not the US, not Britain. What Britain had to do was play its part in protecting the global financial system and he again opened the door to another increase in Britain's subscription to the IMF. "Britain will face up to its responsibilites," he said. Any extra funds for the IMF would almost certainly be most likely used by Eurozone states and so Britain would – albeit indirectly – be involved in keeping the EU17 together. Yesterday, the PM was at pains to remind British taxpayers that the IMF has never lost any of its member states' subscriptions.

The Conservative leadership's preference for keeping the Eurozone together puts it at odds with leading Tories including Boris Johnson, Martin Callanan MEP and two-thirds of Tory members. 66% of Conservative members told ConservativeHome in our latest survey that countries like Greece should leave the single currency before the zone gets any more assistance from British taxpayers.

Getting any higher IMF subscription through the Commons might be tricky. Ed Balls warned yesterday that "David Cameron must clarify that there should be no IMF funding to plug the gap in the bailout fund and do the job the ECB should be doing". 32 Tory Eurosceptics have already joined with Labour once before in a failed attempt to defeat the recent boost to IMF funds. They would probably do so again and after the EU referendum revolt they might do so in even greater numbers.