Britain has already injected £1.88bn into the European Investment Bank (EIB) and pledged another £35.7bn, equivalent to close to 2pc of UK GDP, to be drawn down as required. Although the EIB, which is the world's largest non-government borrower, ranks above other unsecured creditors, thanks to its "privileged relationship" status under the EU treaty, it could face huge losses in the event of a euro break-up. If the UK's stake in the European Bank for Reconstruction and Development (EBRD) is included then the total capital commitment for the taxpayer could rise by a further several billion pounds. On top of this the country could also be called on to stump up some of the cost of the EU's emergency funding facility the European Financial Stability Mechanism. "What the public doesn't realise is the quite simply staggering amounts of taxpayer money that has already been committed if things get significantly worse. This may be a doomsday scenario, but recent history has proven that many events thought extremely unlikely have a funny habit of coming to pass," said one London-based credit analyst. The EIB's most recent accounts reveal huge sovereign credit risk exposures to the endangered periphery states. Some €14.2bn of loans were made to, or guaranteed by, the Greek government. Another €7.7bn is backed by the Portuguese sovereign.
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