Baroness Stuart of Edgbaston
Main Page: Baroness Stuart of Edgbaston (Crossbench - Life peer)Department Debates - View all Baroness Stuart of Edgbaston's debates with the HM Treasury
(14 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Osborne
I am a believer in national sovereignty, so I do not propose to tell other countries what they should do with their currencies. I would just make this observation, since this has been a debate I have heard in recent years: Ireland has all its sovereign debt denominated in euros.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
Ultimately, the bail-out will work only if Ireland can retain its competitiveness. Traditional International Monetary Fund packages always include reducing public spending, increasing tax rates and devaluing the currency. The third element, which is essential for Ireland’s recovery, is missing. What makes the Chancellor believe the bail-out will work under those conditions?
Mr Osborne
If it is not possible to devalue the currency, there is a more difficult route, which is to try to enforce competitiveness through, for example, wage cuts, and that, of course, is part of the Irish package. It does make things more difficult, but, as I say, those of us who argued against Britain joining the euro made all these arguments at the time. That makes for a very good discussion, but at a very theoretical level given the very practical immediate challenges we face in Ireland.