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A new report from the Bruges Group shows that the UK’s maximum possible loss is €149.2bn.

The EU commissioner for economic and monetary affairs, Olli Rehn (R), with Werner Hoyer (C), head of EIB, and the EU commissioner for internal market and services, Michel Barnier.

The UK’s potential debt to the European Investment Bank (EIB), the European Central Bank (ECB) and the European Financial Stability Mechanism (EFSM) is £119bn, according to a new report by the management consultant Bob Lyddon, commissioned by the Bruges Group.

In total, the UK has a maximum possible loss of €149.2bn on current capital and in commitments to institutions involved in the financing of the EU and the euro. This does not include any exposure through the International Monetary Fund.

The think tank points out that the ECB is entitled to call upon the Bank of England for up to €50bn of the UK’s currency reserves. Meanwhile,  the EIB can call upon up to €35.7bn from the UK, should it lose money on the loans that it has made to governments and banks in vulnerable economies such as Greece, Portugal, Spain, Italy and Ireland.

The UK currently has a €60bn liability to the EFSM, which could increase, depending on future defaults. There remains serious doubts about Greece’s continuing presence in the eurozone, due to its debt crisis.

The UK’s €1.9bn of paid-in capital to the EIB and a further €1.6bn to the ECBank (lodged to pay the UK’s share of its costs) are also at risk, the report claims.

 Link to New Statesman article, May 2012