EU: Financial Assistance

Lord Lawson of Blaby Excerpts

Wednesday 15th December 2010 Lords Chamber

[Lord Sassoon]

My Lords, I did not intend to be evasive but to give a factually correct Answer in respect of Articles 125 and 122. I was not asked whether we thought it was proper to use Article 122 in this way. As to whether it is proper to extend loans, to answer a question that the noble Lord did ask, we have decided, in the exceptional case of Ireland, which is our fifth largest trading partner, that it is in the interests of the UK economy to extend a bilateral loan to it. That does not mean that we will participate in any other permanent arrangements that may be put in place for the eurozone.

[Lord Lawson of Blaby]

Can my noble friend confirm that, as our right honourable friend the Chancellor of the Exchequer told the Economic Affairs Committee of this House very recently, it is Her Majesty's Government’s firm commitment to withdraw from the European Union’s financial stability mechanism at the earliest opportunity—obviously while wishing the European Union every possible economic success?

[Lord Sassoon]

I am grateful to my noble friend, because his question enables me to say that Article 122.2, under which the financial stability mechanism was set up, was originally intended to provide support for member states following natural disasters. It was European Finance Ministers, before my right honourable friend the Chancellor took office, who decided in May to apply that article to deal with the eurozone crisis at that time. It is absolutely the position that my right honourable friend who is now the Chancellor opposed the use of the article at that time and in that way. It is the Government’s position that this is a temporary solution and should absolutely not be the permanent way of doing things.