UK's loan to Ireland 'not blank cheque' for struggling nations

Britain agreed to give Ireland a loan because of the special relationship between the two countries, and is not a sign it will bail out other nations, George Osborne said today.

The Chancellor said the aid to Ireland was purely down to the necessity of helping it cope with its financial crisis.

"It is not a sign of blank cheque for other countries," he told CNBC Europe.

Britain will make a bilateral loan of £3.25 billion to Ireland, as part of a package totalling around £7 billion.

Mr Osborne spoke as Germany's economy minister said that a eurozone country could "in principle" become insolvent.

Rainer Bruederle said at a book launch that there would be no help with liquidity or other assistance for eurozone members against Germany's will.