Eurozone

Graham Stringer Excerpts

Monday 10th October 2011 Commons Chamber

[Mr Osborne]

My hon. Friend is right to remind us that the G20 summit in Cannes is the last of a string of international meetings that have involved the G7, ECOFIN, which the Treasury Secretary attended, the International Monetary Fund, G20 Finance Ministers later this week and the European Council next week. It all culminates in the G20 meeting of world leaders at Cannes. That really is the moment when the world needs to be in no doubt that there is a solution to the eurozone problems and that we have the firepower and strength in the banking system to deal with them. If we do not deal with them, the situation will go from bad to even worse. However, as I say, it would not be sensible to advocate to our European colleagues the break-up of the euro. That would greatly diminish what we had to say in these meetings, as it would not be seen as practical—[Interruption.] Well, I also think it would be wrong, as it is not in Britain’s national interest to see the euro break up.

[Graham Stringer (Blackley and Broughton) (Lab)]

The Chancellor of the Exchequer says that he wants to make the euro work, although he also says that it is the epicentre and the cause of instability in the world economy, and he talks about co-ordination of fiscal policy and cash transfers. Is that not just a euphemism for taking central control away from many of the peripheral democracies in Europe, and does not the loss of democracy in countries many of which were recently fascist pose a greater danger than an orderly break-up of the euro?

[Mr Osborne]

The eurozone was also described as the epicentre by the president of the European Central Bank, Jean-Claude Trichet.

The hon. Gentleman is right: we are talking about the exercise of greater control over the finances of other nations by the eurozone authorities, which is one of the reasons we should be very grateful that Britain is not part of those arrangements. The hon. Gentleman mentioned some of the social and political strains that that might lead to. As I have said, those who follow the remorseless logic of monetary union end up with greater fiscal union, which involves all sorts of sovereignty issues for all the countries in the euro; but I must add that I do not recognise the image of the green pastures of a break-up of the euro and what might happen after that event in Greece. I think that political and social tensions could be considerably higher in countries such as Greece if they left the euro, and that such action could bring about the situation to which the hon. Gentleman referred and which none of us wants to see.