G8 and NATO Summits

Glyn Davies Excerpts

Wednesday 23rd May 2012 Commons Chamber

[The Prime Minister]

The Greeks have had a very special deal—an enormous private sector haircut on their debt, through which creditors have been asked to take a share of the burden. The money that Greece has received in the last decade from the European Union could have gone into many of the projects that the hon. Gentleman points out. Part of the problem in parts of the eurozone is that the early years of the euro saw wage rates and unit costs of labour rise, rather than their being fundamental changes to make these countries more competitive.

[Glyn Davies (Montgomeryshire) (Con)]

It seems that there is a strong possibility that Greece will be forced out of the eurozone, and we are obviously concerned about the impact on the economy that a disorderly exit may have. Does my right hon. Friend agree that we need to hold discussions with our European partners and develop contingency plans to ensure that such an exit has the minimum possible impact on the United Kingdom?

[The Prime Minister]

My hon. Friend is entirely right. Obviously, this is not something we want to see happen, and it is in our interests that the eurozone deals with its issues, strengthens its firewalls and strengthens its banks, and that we start to see the high interest rates in parts of Europe come down. But it would be irresponsible not to prepare proper contingency plans, and that is what the Treasury and others have been doing. As I say, whether Greece stays in the euro or not is not within our power, and we must prepare for all eventualities; but obviously, a disorganised exit would cause real difficulties.