EU: Financial and Monetary Co-ordination

Lord Dykes Excerpts

Monday 6th June 2011 Lords Chamber

Asked By

[Lord Dykes]

To ask Her Majesty’s Government whether they will consider making proposals to their European Union partners to strengthen economic, financial and monetary co-ordination within the Union.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, six legislative proposals aimed at strengthening co-ordination on financial and economic matters across the EU have already been agreed by the ECOFIN Council. These are currently the subject of discussion and negotiation with the European Parliament. The measures would strengthen the stability and growth pact and formalise the monitoring of economic imbalances. The Government recognise the importance of strengthening co-operation and co-ordination, and fully support the package agreed by ECOFIN.

[Lord Dykes]

My Lords, I thank the Minister for the way in which the British Government have strongly supported in ECOFIN the various measures that are being taken by both the ECB and the member Governments. Does he agree that advanced countries like the United States and other leading countries like Britain were already heavily indebted before the financial crisis and are even more so now, and that it is important for this country to stand in support of the eurozone countries and the ECB to defeat the ruthless international speculators wherever they may be, especially as—you never know—we might need their help in the future?

[Lord Sassoon]

My Lords, I am grateful to my noble friend for what he says about the Government’s approach to these matters. It is indeed in the country’s interest to ensure that the eurozone is strong—it is, after all, where more than 40 per cent of our exports go—and we will continue to work constructively on ideas to strengthen the framework. At the same time, we want to make absolutely sure that it is understood, as the Council has recognised, that the UK stands in a special relationship to the eurozone and that we will not have the fiscal sovereignty of Parliament in any way infringed on these matters.

I agree with my noble friend that fiscal discipline is key to ensuring that we do not get into problems like this again, whether within the eurozone or without it, which is why it is gratifying to see that the IMF, in its assessment today, has stressed this very point in relation to the UK’s deficit reduction programme.