Banking Union and Economic and Monetary Union

David Ruffley Excerpts

Tuesday 6th November 2012 Commons Chamber

[Mr Clappison]

My hon. Friend pre-empts my next point. I am drawing attention to the voting arrangements laid down as a matter of European law in a regulation that gives the eurozone the whip hand, as matters stand. But of course he is absolutely right that other non-members of the eurozone have the ambition to join the euro and that, along with Denmark, we do not have to join it as a result of the opt-out.

As my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) said, even without the legal obligations we could expect members of the eurozone to cohere together to be a majority, and we can see that it will be a growing majority.

[Mr David Ruffley (Bury St Edmunds) (Con)]

If the opt-in countries and eurozone members are subject to the ECB rules but are not legally called a caucus because the ECB does not write it down as such, they will nevertheless, de facto, hunt as a pack and outvote us in the European Banking Authority, so it does not matter what the regulation says.

[Mr Clappison]

My hon. Friend is right. It is quite extraordinary to have a regulation setting out that they must act in a caucus, even though it is probably likely that they will do so anyway of their own free will; they will certainly see a common interest in it.

This sets a very worrying precedent for the future whereby the eurozone is going in one direction in working together as a political, coherent body, and being required to do so as a matter of law. For the avoidance of any doubt, and particularly for the benefit of the hon. Member for Cheltenham (Martin Horwood), I will read out the provision that is in black and white—not up in the air somewhere, subject to negotiation—on page 33 of our documents. It requires member states of the eurozone:

“To co-ordinate and express a common position of representatives from competent authorities of the participating Member States when participating in the Board of Supervisors and the Management Board of the European Banking Authority, for issues relating to the tasks conferred on the ECB by this Regulation.”

That is European law, and if they fail to do what it says they will be breaking it—although they may, of course, choose do it anyway of their own free will.

This is a striking illustration of the fact that the eurozone is going in one direction, seeing its political interests as a whole cohering together, while we stand in a quite different position. This provision, and the nature of the relationship that it seeks to put in place between the ECB and the EBA, should give us all a lot of food for thought, because it has major implications for our future in the European Union.