Greece

Clive Betts Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

All British banks have greatly reduced their exposure to Greece over the past few years. Continental banks have also reduced that exposure, so British banks are less indirectly exposed. Collectively, less than 1% of the core tier capital of the British banking system is exposed to Greece. We are therefore much better prepared than we might have been a few years ago. Also, our own economy is stronger and we are not in such a vulnerable position in regard to our public finances as a result of the difficult decisions we have taken. We are in a much stronger position to deal with whatever comes, but we are an open economy, and a financial crisis in Europe is not something that will just pass Britain by.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Chancellor has rightly said that a number of difficult issues need to be resolved if agreement is to be reached between Greece and its creditors. Last week, the IMF said that even if all the other issues were resolved, any agreement would be unsustainable unless debt relief formed part of the package. Do the Government agree with the IMF on that key point?

[Mr Osborne]

We agree that a key issue is Greece’s ability to make its debt repayments. That is self-evidently the case because it failed to make a debt repayment to the IMF last week, and it also has to make a big debt repayment to the European Central Bank. I do not think it is right simply to pick out one piece of the IMF’s advice. It has also stated strongly that the Greek economy needs major structural reform, for example. We have to look at the IMF’s advice in the round, which is why it is such a valuable institution.