G20

Kelvin Hopkins Excerpts

Monday 7th November 2011 Commons Chamber

[The Prime Minister]

My right hon. Friend asks an important question. It goes back to the question that the Father of the House asked, about the actions of the ECB. The ECB has been intervening in markets and buying bonds of countries that are under pressure. That is what makes it so difficult to understand why some in Europe are so opposed to the ECB being more of a monetary activist, if I could put it that way. The key with Italy—everyone should be careful about speculating about another country—and the point I made in my statement is that Italy must demonstrate that it has a credible fiscal path. That is as much about the confidence of the markets that it will be able to pay its deficit and pay its debts. If it can do that, its interest rates will fall.

[Kelvin Hopkins (Luton North) (Lab)]

The door marked “Exit from the eurozone” is now clearly in view and a number of eurozone states are moving inexorably towards it. Is it not obvious that until those states can recreate their own national currencies and find an appropriate parity for those currencies, they will not recover?

[The Prime Minister]

The hon. Gentleman refers principally, I think, to Greece. That is an issue that the Greeks have to decide themselves. They have been offered a deal that writes down their debts and can enable them to stay in the single currency; it is their decision whether to take that road or to take another road. The only thing I would say to Members of the House who are deeply sceptical about a single currency, of whom I am one, is that we should be very careful to recognise that countries leaving a single currency can cause all sorts of knock-on effects and problems for other economies, including our own. We should not see it as some sort of painless easy option for a country to fall out of the euro. It would have very real consequences for other countries, including our own, and we have to think about that in that context.