Greece

Andrew Gwynne Excerpts

Monday 29th June 2015 Commons Chamber

[Mr Speaker]

Order. I am keen to accommodate the remaining interest, but only on the assumption that we can wrap this up by 6.30, so I appeal for extreme brevity, to be exemplified by the hon. Member for Denton and Reddish (Andrew Gwynne).

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

The Chancellor said in his statement that eurozone authorities

“stand ready to do whatever is necessary to ensure the financial stability of the euro area”.

That may well be tested to the full in the coming weeks. Given that the lesson of the exchange rate mechanism is that pressure will undoubtedly be mounting on other European currencies and economies, what contingencies does he have in place to make sure there is no domino effect?

[Mr Osborne]

As I say, the primary responsibility lies with the eurozone and the European Central Bank, and they have put in place better mechanisms than they had three or four years ago. The European Central Bank has its outright monetary transactions mechanism, we have the European stability mechanism—in other words, bail-out funds—and the European Central Bank is also taking a supervisory role, so they are better prepared. However, I was very clear in my statement that however well prepared they are, a Greek exit from the euro would be a substantial financial shock, which would have an impact on the European financial system and on us. That is why we have taken steps to make sure our banking system is better prepared than it was seven or eight years ago.