European Union Bill

Lord Hamilton of Epsom Excerpts

Wednesday 8th June 2011 Lords Chamber

[Lord Davies of Stamford]

My Lords, I am going to resist the great temptation to respond to the noble Lord, Lord Lamont. I do so not because I do not think that he is completely wrong, which I think he is. He is quite wrong to write off the euro in this way, and he is wrong to suppose that we would not have had to face a systemic crisis caused by fiscal collapse in Ireland, Portugal and Greece. Whether or not the euro had ever existed, we would have needed to take intelligent and concerted action. The noble Lord, with whom I have debated these matters with great pleasure on many occasions over the years, is as wrong as he has always been. I am happy to give him good money in a private conversation afterwards that the euro is far from being in a state of crisis and that it will survive.

I hope noble Lords understand the very important distinction between a fiscal crisis, which has hit a number of countries that are members of the eurozone and have the euro currency, and a crisis for the euro itself. You can have a fiscal crisis caused by Governments overborrowing irrespective of the currency in which they are borrowing. Even if those countries had been members of the dollar area and had borrowed so much that the financial markets were in danger of ceasing to refinance them, there would have been a crisis affecting them; and because of the number of assets that we inevitably hold in those countries, which are major trading partners of ours here, we could not have been immune to a fiscal crisis irrespective of the currencies involved.

[Lord Hamilton of Epsom]

Does the noble Lord accept that the ECB is technically bankrupt?

[Lord Davies of Stamford]

I accept nothing of the kind—the ECB has a triple-A credit rating, as I am sure the noble Lord knows.