Eurozone Crisis

Kelvin Hopkins Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

If my hon. Friend is referring, as I suspect he is, to the European Union Act 2011, there are clear procedures in place for establishing whether powers or competences are being transferred from the UK and this Parliament to Brussels. Those procedures are clearly set out, but I would say that it is in our interests that the euro works. That requires greater fiscal integration within the eurozone, which works to the benefit of Britain, provided that—this is an important proviso—we can continue to ensure that our voice is heard on issues that are for the 27 members, such as the single market, competition policy and financial services. That is what we will be fighting hard for in the coming months.

[Kelvin Hopkins (Luton North) (Lab)]

I remain wholly unconvinced that the euro can survive in its current form, unless the weaker countries are permitted to recreate their own currencies and devalue. They currently face permanent deflation and permanent handouts from Germany. That is no future for them, and no future for Europe.

[Mr Osborne]

The hon. Gentleman has consistently made that argument for at least as long as I have been a Member of the House of Commons, and longer still. He probably takes some comfort in the fact that events over the past decade have tended to reinforce the views that he has expressed, but I would say this: it is in Britain’s interest that we make the euro work. The disorderly break-up of the euro, or any break-up of the euro, would be an enormous economic blow for this country. Forty per cent. of our trade is with the eurozone.

If we set aside the arguments that we will have this autumn and next year about the domestic effects of the Government’s policies—the Government will argue that they promote growth, and the Opposition will argue that they undermine it—everyone in the House would accept that instability in the eurozone has had a chilling effect on the British economy and other economies. If that is what a bit of instability and market volatility can create, let us just imagine what the break-up of the eurozone will do to this economy.