G8 and NATO Summits

Julian Brazier Excerpts

Wednesday 23rd May 2012 Commons Chamber

[The Prime Minister]

We did discuss the issue of infrastructure development, because I think that it can be part of what needs to be done. The rise of unemployment is tragic in any country, but the figures in Greece, Spain and elsewhere in southern Europe are eye-watering: 50% of young people are unable to find work.

As I have said, I think that the elements of the plan that we need are the fiscal credibility that provides low interest rates and the active monetary policy that supports demand in the economy, as it has in the UK, but combined with structural reforms. There is a need for proper structural reforms in Greece and other countries so that they can have competitive economies. The extra element is using the credibility that we have earned, and the strength of the Government’s balance sheet, to try to deliver innovative finance to infrastructure and credit. That is obviously an option that is open in Europe as well, and I think that it is what President Hollande is referring to when he talks about project bonds. Those are the elements of a growth plan. We have them all in the UK, and we need them in Europe as well.

[Mr Julian Brazier (Canterbury) (Con)]

Does my right hon. Friend agree that when we look at the scale, and the time scale, of the burden that fell on what was then West Germany at the time of German reunification, we have a sense of the awesome challenge that would face any German Chancellor trying to achieve fiscal union in Europe?

[The Prime Minister]

Yes, I think that my hon. Friend is entirely right. Some people imply—it was implied in the question from the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling)—that German stubbornness is unreasonable. It is understandable. Obviously, for the success of the eurozone we need everyone to adopt approaches such as those I have described in terms of monetary policy, eurobonds and the rest of it, but it is important to understand people’s motivations and difficulties, because they are what lie behind the current impasse.