Eurozone Crisis

Julian Brazier Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

The honest answer to the hon. Gentleman’s perfectly good question is that, on the morning after the night before, we do not know because important details remain to be resolved. We need to see the detail of how this 50% write-down of Greek debt is going to happen and we need to see how the new firewall will work in practice. We have to see the details: until they are in place, this will remain unresolved and the instability might return. The answer to the hon. Gentleman’s question is that when the detail is in place, we should be able to make an assessment of whether it has calmed the markets and improved the UK growth position.

[Mr Julian Brazier (Canterbury) (Con)]

While strongly supporting my right hon. Friend’s robust defence of the national interest, may I ask him what the statement means where it says “to provide, from the bail-out fund”, presumably the existing bail-out fund, “insurance on new debt issued by eurozone countries”, presumably including Italy?

[Mr Osborne]

The concept here is that first-loss insurance on newly issued debt from countries such as Italy, as my hon. Friend mentions, would be provided out of the special purpose vehicle. That would obviously make it easier for investors to buy bad debt.