Greece

Andrew Gwynne Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is right. We have reduced our exposure, as I said, to the Greek economy and, absolutely crucially, the Prime Minister made sure we were out of the bail-out funds for Greece that existed when we came to office. With hindsight, that looks like one of the most important decisions we took.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The form of any contagion is not yet known, but surely one of the dangers is capital flight from the poorer southern eurozone economies to the richer northern economies. That would not just be a disaster for Greece, Italy, Portugal and Spain, but it would have ramifications for the wider European Union, which are political, as the Chancellor has intimated. Given that, what discussions are he and his officials having with European Finance Ministers to make sure that the European single market is not undermined?

[Mr Osborne]

The hon. Gentleman is right that capital flies from countries in distress. That is why the Greek Government have had to impose capital controls. We see German bund spreads coming down today. That is a consequence of an open and free market and, as I said in reply to an earlier question, it is difficult to defy that market, as Greece is seeing. More broadly, we want to make sure that the eurozone finds some sustainable way forward so that we avoid these tensions, which spill out into the political system.