European Union (Approval of Treaty Amendment Decision) Bill [HL]

Lord Howell of Guildford Excerpts

Wednesday 23rd May 2012 Lords Chamber

Moved By

[Lord Howell of Guildford]

That the Bill be read a second time.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, in bringing this Bill before the House, I am very much aware that I do so at a time when the spotlight is on the eurozone. As the Prime Minister said last week, it is vital for Britain’s interests that the eurozone resolves its problems. I do not underestimate those problems. On Monday, a number of noble Lords gave their very expert views on the broader issues during the debate on the report of the European Union Committee on the euro area crisis. It was a very interesting debate.

However, this Bill is simple and straightforward. It provides solely for the parliamentary approval of an amendment to the Treaty on the Functioning of the European Union. The proposed amendment makes explicit the ability of eurozone countries to set up a financial assistance mechanism. In other words, it confirms that the eurozone can support fellow eurozone members in financial difficulty.

Although the United Kingdom is not in the eurozone, the treaty amendment is nevertheless important to us. The eurozone is in the process of setting up the European stability mechanism—or ESM. I apologise for these endless initials. The ESM will play an important role as eurozone countries work towards stability, which obviously we hope they will do. Eurozone stability is important for our own stability. When the Prime Minister agreed to the treaty amendment, he also secured an important commitment. The UK will not be liable through the European Union budget for any future eurozone bailouts once the European stability mechanism comes into force. In effect, that is another way of saying that the European financial stability mechanism will be closed down and there will be no further disbursements from that source.

[Baroness Quin]

The Minister has stressed, as have other Ministers, that we are not liable to contribute to any future bailouts. Will he none the less confirm that if we judge that it is in our economic interest to do so, as we did in the case of Ireland for example, bilateral help can be available?

[Lord Howell of Guildford]

There is complete freedom outside the treaties to take any decisions we want. I will come in more detail to what I have just said in reference to the EFSM, and during the afternoon we can discuss what other mechanisms of support for economies, whether in Europe or the eurozone or not, are justified, but that is the position in relation to what we are discussing today.

It is not the first time that this treaty amendment has been considered by Parliament. Before the Prime Minister signed the treaty last March, a Motion in favour of signature was passed by both Houses, with no opposition in your Lordships’ House. At the time I committed to bringing the decision before Parliament again. Thus we are applying the more rigorous requirements for parliamentary control over European Union decision-making, as we committed to do in the European Union Act 2011. Parliamentary approval will enable the UK to complete its ratification process for this treaty amendment.

I recognise that 14 months is a long time in eurozone terms, so it may help your Lordships if I recap how the European Council came to decide to amend the treaty. In May 2010, in response to the first Greek crisis, two emergency instruments were established to respond to the financial crises. The first is the European financial stability facility. This is an emergency facility established intergovernmentally by euro area member states. It is used to provide loans to euro area member states in difficulty. The UK is not—I repeat, not—a member of the EFSF and has no exposure to the financial assistance provided by it.

The second is the European financial stabilisation mechanism, which I have already mentioned, which we inherited from the previous Government. Under this mechanism, the Council can agree, by qualified majority, to the Commission providing assistance using money raised on the financial markets, backed by the European Union budget. It therefore created a contingent liability for the United Kingdom, which is a very important point.

As uncertainty continued in financial markets, the European Council agreed in December 2010 to amend Article 136 of the Treaty of the Functioning of the European Union. The amendment confirms that member states of the eurozone may establish a permanent stability mechanism. This mechanism—the European stability mechanism, or ESM—which I have already mentioned, will provide a permanent means for dealing with events that pose a risk to the financial stability of the euro area as a whole.

Having gained Parliament’s approval in March 2011, the Prime Minister returned to Brussels to agree to the decision at the European Council. The decision must now be ratified by all 27 members before the amendment to Article 136 can come into force. The target date for entry into force, as set out in the European Council decision, is 1 January 2013.

As I have already mentioned, the Minister for Europe and I committed to further consideration of the decision under the terms of the EU Act 2011 when it came into force. Under the provisions of Section 5 of the Act, the Foreign Secretary laid a Statement before Parliament in October 2011. He indicated that in his opinion a referendum is not required to give parliamentary approval. The proposed amendment to Article 136 applies only to member states whose currency is the euro. Consequently it does not transfer further competence or power to the European Union from the United Kingdom. The statement was open to judicial review, but in the intervening eight months no one has sought to challenge it in the courts.

To comply fully with the requirements of the EU Act, I am now presenting this Bill to the House. Should Parliament grant its approval, the Government intend to ratify the European Council decision by the end of this year.

Now I turn briefly to the European stability mechanism itself. The ESM is a stability mechanism funded by eurozone countries to provide financial assistance to eurozone countries. The intention is that it will replace both the EFSM and EFSF. It is being set up under an intergovernmental treaty that was signed on 2 February by eurozone member states. It must now be ratified by all 17 member states and is expected to come into force in July 2012.

The treaty amendment does not establish the ESM. The UK, of course, will not ratify the ESM as we have not signed up to the intergovernmental agreement, and the amendment certainly does not commit the UK to contribute to any bailout fund. However, let me make it clear what the decision does. The treaty amendment that we are asking Parliament to approve will put beyond doubt the ability of eurozone countries to set up a financial assistance mechanism. It does this by adding a third paragraph to Article 136, which states that eurozone member states may establish a financial stability mechanism to assist other eurozone member states in financial difficulties. Article 136 applies solely to member states whose currency is the euro. Therefore, the provisions of Article 136 do not apply to the UK.

Alongside the agreement to enshrine the legal basis for the mechanism in the EU treaty, the Prime Minister secured an important agreement. Once the ESM is established, Article 122(2), on which basis the EFSM was established, should no longer be used for such purposes. Our liability for future euro area financial assistance programmes under the EU budget will be removed. This is strongly in the UK’s national interest.

The intensification of the crisis has led eurozone member states to agree to bring forward the introduction of the ESM to July 2012. When they announced this decision in January, we carefully considered the implications that it would have on our handling of the treaty amendment. Would it need to be ratified sooner, and was it still needed at all? We decided to proceed as planned, as it has always been the Government’s opinion that without the agreement to amend the treaty there would be no European stability mechanism. The clear message from eurozone member states is that they still need this treaty amendment.

That brings me back to the central point of why this Bill is important.

[Lord Davies of Stamford]

I am most grateful to the Minister for giving way. He said that it was the intention that the ESM should now enter into force next month. Indeed, we support the urgency of that, as I understand it. Therefore, why are we taking so long to ratify this? If we really support the initiative and recognise its urgency, why cannot we ratify it as soon as Parliament has approved this Bill?

[Lord Wallace of Saltaire]

My Lords, I do not think that it has been the usual practice of this House to interrupt Ministers in the middle of their opening speeches, when they are also winding up and when the interrupter has his chance to take part in the debate afterwards. These are questions that the Minister can answer in his wind-up speech.

[Lord Howell of Guildford]

As I have sought to explain, the ESM treaty is an intergovernmental affair between eurozone members, and they are going ahead with it—and they want to go ahead with it—in July. Nevertheless, the individual eurozone members have said that they would want the comfort of cover via an amendment to the European Union treaties, and we are pressing ahead with that as best we can in our own time. The two things are not ultimately dependent; it is just that the changes that we are proposing give comfort, support, reassurance and legal reassurance to the eurozone members so that they can go ahead. Therefore, those who say, “You are not doing anything to play your part in contributing to orderly developments in the eurozone”, are wrong. We are playing our part in doing so, although there are considerable benefits for the UK in making this move, which I have already outlined.

This brings me back to why this Bill is important. It represents Parliament giving a simple yes or no to amending part of the TFEU that does not actually apply to the UK at all. However, as I have made clear, by giving approval to this decision the UK avoids liability for future eurozone bailouts under the EU budget and gives the eurozone the legal clarity—this may reinforce the point I have just made—that it wants to back the European stability mechanism. We also uphold the commitment made by both the Prime Minister and the Chancellor to help the eurozone to get itself out of a crisis. Whichever way the situation goes, that must be to the advantage of us all.

If we were to refuse to agree the decision, the impact on our trading partners in the eurozone would not be positive, to put it mildly. We are under no illusion that the ESM alone will resolve the eurozone crisis, but, as the Prime Minister said last week, an effective firewall is part of the solution. It is safe to assume that markets would not view favourably any uncertainty about the eurozone’s ability to establish a permanent support mechanism. That is just what would arise if we failed to ratify this decision.

As the Prime Minister, my right honourable friend the Foreign Secretary and the Chancellor have repeatedly made clear, a stable Europe is directly in the UK’s interests. That must be so. We rely on the eurozone states for over 40% of our trade. London is Europe’s international financial centre. Stable progress in the eurozone states is vital to stable progress in the United Kingdom.

Therefore, agreeing to this treaty amendment is in our best interests. As I have said, it means that the UK will not be exposed to any future programmes of financial assistance for the eurozone through the EU budget, specifically the European financial stability mechanism—that will be closed—and it helps our neighbours in the eurozone in their search for financial stability in the currency area. Your Lordships have already agreed that the Prime Minister could sign this treaty amendment, as he has done. I hope that we can now take the necessary steps to allow us to ratify it. I beg to move.

--- Later in debate ---

[Lord Stoddart of Swindon]

My Lords, the House is indeed fortunate to have present in this debate two former Chancellors of the Exchequer, who were able to impart their considerable experience over a wide area of matters, particularly in regard to the setting up of the eurozone. I am grateful to them for their speeches today.

Why are we hurrying this Bill? Why are we introducing it just a couple of weeks after the Queen’s Speech? There is no rush for it. Unless I am mistaken, the Irish are to have a referendum on the matter at the end of this month. The Germans will not ratify this policy until the autumn. I even noticed in today’s Financial Times that Geert Wilders has applied for an injunction to block ratification until after the September elections.

I heard the statement made by the noble Lord, Lord Howell, and others that a,

“healthy eurozone is important for the UK’s long-term growth”.

I put in there that that does not hold water, but that clearly was not robust enough because the noble Lord, Lord Lawson, described it, in much more stark terms, as “nonsense”. I think that that is a better description of it.

[Lord Howell of Guildford]

The issue of whether I was talking nonsense or not seems to have rattled through the debate. I think that we will all listen with fascination to the noble Lord’s speech, just as we listened to the excellent speech of my noble friend Lord Lawson. However, there was an error in that perhaps they did not hear my actual speech. I made it absolutely clear that stable progress in the eurozone states is vital to stable progress in the United Kingdom. That is not quite what the noble Lord seems to be accusing me of saying.

[Lord Stoddart of Swindon]

It was not an accusation because I thought that I was quoting him. I am most obliged to the Minister for clarifying what he did say. I really do not like getting across the noble Lord, Lord Howell, because I respect him very much and think that he is perhaps the only statesman that the Government have among their ranks.

[Lord Lawson of Blaby]

For the sake of clarification, I was not quoting what my noble friend said in his opening remarks, which were rather more careful. What I explicitly quoted is what appeared under his name on the Foreign Office website, and I quoted that correctly.

[Lord Howell of Guildford]

I appreciate that he was relying on a press release, but I had hoped that, as he is sitting here, he might also have listened to my speech.

[Lord Stoddart of Swindon]

Now that we have that out of the way, perhaps I can get on with my speech. There is no doubt, as other noble Lords have said, that the eurozone was a political construct, not a financial one, to create a single European state. Because it was made up of nations with diverse economies, it was bound to fail, as it now has. The noble Lord, Lord Radice, accused those of us who gave pause when the project was starting up of gloating because it has now patently failed. I do not gloat, and I do not think that others who warned of the consequences do so because the eurozone is now in difficulties. We believed that it was always going to be in difficulties; and for trying to point that out, we were derided and insulted. Indeed, the former Prime Minister, Mr Blair, said that we were unpatriotic. There is no gloating about this. We are extremely sad that the present situation has arisen.

As I understand it, the Bill allows the eurozone to further integrate and consolidate a failed system by attempting to shore it up through fiscal, economic and political union under central control by the large countries. I believe that the claim that the ESM cannot and never will apply to the United Kingdom is spurious and quite untenable. Article 16 expresses the aim that within the five years the treaty will be incorporated into the EU treaty framework, which presumably will include this country. Furthermore, we have heard all this before. Let us remember the famous Blair “red lines” over the EU constitution. All of them were eventually crossed and incorporated into the Lisbon treaty. We have to be careful when we are given assurances that certain things will not apply to this country.

I really must comment on the behaviour of the Prime Minister. He does not inspire confidence that the United Kingdom will not be sucked into this system. He seems to be suffering from EU schizophrenia. On the one hand, he opposed the setting up of the eurozone and has said that the UK will never join it; but on the other hand, he wants to dictate policy from the outside and has threatened the Greeks that if they do not vote in the right way, they will be thrown out of the euro. No wonder he is seen by the eurozone countries as a bully-boy shouting from the sidelines. He claims to be a Eurosceptic, yet demands more power for the centre.

I would like the Prime Minister to understand that the influential and decisive voices of the EU—for example, Mr Jose Manuel Barroso; Mr Herman Van Rompuy; Mr Wolfgang Schaeuble, the German Finance Minister; and Mr Olli Rehn, Commissioner for Economic and Monetary Affairs—and the shadowy group of Foreign Ministers and many others are calling for complete political integration under a European Government and the destruction or the sidelining of the nation states.

Why is the Prime Minister not shouting that very famous, “No, no, no”? Perhaps he is afraid of being stabbed in the back by the Deputy Prime Minister. The Prime Minister says that we will never join, but I remind him that others want the whole system to be extended into a single European state. This Bill will help those who wish to create a country called Europe, in spite of some voices this afternoon and in other debates who do not wish to see that happen.

--- Later in debate ---

[Lord Howell of Guildford]

My Lords, I congratulate your Lordships on the sweep of your comments and magnificence of oratory in addressing this very modest Bill. I have listened with something verging on pleasure to the expositions of the noble Lord, Lord Liddle. They were very eloquent, but whether they related precisely to the policy of Her Majesty’s Opposition I am not so clear, and whether they related much to the Bill I am not so clear about either. But it was good stuff and I thank the noble Lord for his contribution.

I want to emphasise that many of the issues have given us a marvellous opportunity to air in your Lordships’ House the bigger issues surrounding the whole story of the eurozone and how it fits into the European Union, as well as how the European Union is or is not evolving to meet the challenges of the 21st century. I am not going to take the centre stage about Europe, much as I would love to do so, but will merely concentrate on aspects of the Bill.

There is no illusion about this Bill and we do not see it as magic medicine. We simply believe that it will help to bring order rather than disorder whichever way things go, and who can tell? Experts say they know the answer. We have been told by my noble friend Lord Lamont that it has all been priced into the market, which is wonderful if that is the case, but sometimes the market can get things terribly wrong. We believe that the Bill can make a net contribution, perhaps quite a substantial one, to the pattern of order rather than disorder. I put it no higher than that and make no greater claims for it.

Perhaps I may remind noble Lords of why we have a Bill before us at all. It is because of the increased public and parliamentary control over EU treaty changes that we committed to in the coalition agreement—it was the coalition that put that forward—and delivered through the European Union Act 2011. Therefore, this treaty amendment requires primary legislation. The amendment has already been considered and was debated by Parliament and passed by both Houses last March; there was no opposition in the House at that time. The arguments for the treaty amendment were relevant then and, in a sense, as the bigger crisis has grown and the uncertainties confronting us have magnified, the case for making a move of this kind as a contribution to trying to steady the situation and stabilise an unstable pattern is stronger than it was even when we debated it 14 months ago.

As I explained at the beginning, in return for agreeing to the treaty amendment the Prime Minister secured that once the ESM is established, Article 122(2), on which basis the EFSM was established, should no longer be used for such purposes. Therefore, our liability for future euro area financial assistance programmes under the EU budget will be removed, and that is directly in our interest.

My noble friend Lord Lamont asked just how solid this Article 122(2) decision is. He is right that it is a political decision and not a treaty agreement, but the decision itself, under Recital 4, says very clearly that Article 122(2) should not be used. That was a unanimous decision of all 27 members of the European Union and it would require a unanimous decision to undo it. My noble friend Lord Lamont can still say that is not as good as the absolute of being locked into a treaty, but it is almost impossible to imagine how we would proceed with undoing a unanimous decision, which very clearly has been made in very good faith and is underpinned by the unanimity rule of the European Union. I hope that reassures him. It probably will not reassure him completely, but that is a very firm and clear position.

Secondly, as the European crisis has gone from bad to worse, this is plainly having a chilling effect on the economy. I do not quite see how anyone can avoid that obvious fact. As the Prime Minister, the Foreign Secretary and the Chancellor have repeatedly made clear, stability in the eurozone states—and I choose my words carefully—is directly in the UK’s interest. If there was growth in the European economies rather than the stagnation and indeed the shrinkage that are now being predicted, that would be one of the keys to growth in the UK economy.

We rely on the eurozone countries for a very large part of our trade—40% is the estimate; it is more for the total of the European Union—and it is only part of the picture. Restored, confident stability in the eurozone states is directly in our national interest, and the resolution of the eurozone debt crisis would be a major boost to confidence in the British economy. I do not know whether it is priced into the market; some people say that it is beginning to be so.

Those are my broad comments. I have not gone nearly as far as some of your Lordships in discussing the whole history of the scene, and there have been some fascinating speeches from my noble friend Lord Dobbs and many others about the past, but those are the immediate considerations that we are looking at with this two-clause Bill.

I will now turn to some of the points made. If I do not refer to every speech, it is not because I do not think that some of the speeches were quite brilliant but because they perhaps did not raise precise questions but merely added their wisdom to the general debate.

The noble Lord, Lord Radice, began by saying that we should not stand aloof. I do not think that we are standing aloof. This Article 136 change alone is proof that we are not standing aloof and that we are providing not just comfort but a sound legal base for eurozone countries to go ahead with the ESM. Eurozone countries believe, although others would dispute it, that the ESM is one of the building blocks of the essential firewall to hold the eurozone together; or, as some speculate, if one country was breaking away, the ESM would hold it together even more firmly against further contagion.

I therefore do not think that the suggestion of aloofness stands, combined as it is with the more general view asserted by several of your Lordships that we are disengaged from our role in the European Union region. That is not true. My right honourable friend the Foreign Secretary and indeed the whole Government have argued, rightly, that the great growth is increasingly going to come in Asia, Africa and the emerging markets. We must therefore pay attention to those, but not to the exclusion of the fact that we live in a very vital and potentially dynamic area full of creativity and attractions, and that we must somehow see its revival.

I have before me a list here of some of the growth initiatives that the UK Government are currently pressing. For all I know, these things may be discussed around the dinner table at the informal European Council meeting tonight. We have pressed very hard on the completion of the digital single market, which we think would see a 4% increase in the EU GDP over a 10-year period, and want to see it completed. We want to see full implementation of the services directive, which could add a further 1.8% to GDP. We are pressing for the completion of all open bilateral EU trade deals, which would add another €60 billion to the EU economy. A deal with the US, if we can bring it off, would be bigger than any other free trade agreement. We want the Commission to commit itself to a much more vigorous, new programme to reduce the overall regulatory burden. Those are just some of the growth points we are pushing and I think we will make some progress on all of them. To talk in terms of aloofness is not to represent the situation as it truly is.

My noble friend Lady Falkner rightly said that the Greek default is not easy—people talk about the possibilities of Greek default perhaps a little cavalierly, without being entirely clear whether we are talking about a nation going gently downstream through some mild rapids or being pushed over Niagara Falls. It might be either, and one has to be realistically responsible in analysing that and understanding that possibility.

I have already mentioned my noble friend Lord Lamont in relation to Article 122 and pricing in the markets. He asked me a series of very important questions about the ESM, which I am not deliberately ducking. I have here some very elaborate notes answering those questions on the ESM treaty, but we are not talking about that tonight. That is an intergovernmental treaty between the eurozone countries. We are talking about the treaty change that we are undertaking in Article 136. I hope that he will forgive me, and that other noble Lords will understand, if I do not read out all the details about AAA securities and other aspects of the ESM treaty. I will write to him in so far as I can answer them, but they are matters for the eurozone and not for this Bill.

The noble Lord, Lord Giddens, whose speeches I always enjoy, came again to this familiar theme that somehow Britain is marginal. I must say that I find this whole concept of being marginal to the problems of the eurozone yesterday’s argument and very dated. Many people now see this island, the United Kingdom —or these islands—as a safe haven, into which money, investment and wealth are pouring at a considerable rate. What does he mean by marginal? One could argue that a harbour that is reasonably well protected is marginal to the storm outside. It is not—it is merely the safe place to which people are going to come. Of course, he is right that if we are going to see the new fiscal pact lead to major political developments in the eurozone—and there is obvious dispute in this Chamber as to whether it will lead that way or to further fragmentation—then we are getting an evolving and new kind of Europe. I hope everyone will contribute to the debate on how that new kind of Europe should be best organised to meet the challenges of the 21st century. That is what I would say to the marginalists who keep on about isolation and so on. I do not think that is a realistic view of the situation.

The noble Lord, Lord Lawson, and I had a good-natured hair-splitting about whether I was arguing one thing or another. I hope that I have made it clear that we are talking about the eurozone countries. The euro currency is another matter but he must concede, as I am sure that all your Lordships concede, that in the states that happen to be European states—including our great neighbours France and Germany—what happens to them and their economies clearly affects our country in a very big way. I do not think that that can be questioned.

My noble friend Lord Flight asked about the EFSM and whether it is cash. It is €48 billion of loans to Portugal and Ireland, at the moment, and the intention is that they will be repaid. We would be liable for 14.6% of anything that was not repaid but that would balloon up to the sort of figure referred to in the document that he mentioned only if every single one of the countries, except us, defaulted. It is technically true that we would then be liable but that seems to be so unlikely as to be on the verge of absurdity. Exposure to the ECB is only for a capital contribution for its operating costs, which is €58 million—not billions but millions. By the standards of these huge sums we are talking about, that is a fairly limited sum. Because we are a non-eurozone member, our liability does not go beyond that.

I think that my noble friend spoke about the EIB, which is a bank where there have been no defaulted loans at all. It has €43 billion of our capital and we would be in danger of exposure to that only if the bank itself was in danger, which it clearly is not. He may or may not have spoken about the EU balance of payments facility, which has been raised. It may have been raised in the document we talked about, but it is only for non-euro members. The liability arises with members who are not members of the eurozone, so it does not really arise in this case.

The noble Lord, Lord Stoddart, then made a speech which did not surprise me. He is a valiant trooper and worker in his own seam and of his own view, which he has put over the years. I admire valiance and courage even when I do not agree with it. He asked why we were not having a referendum when the Irish were. Of course, the Irish are having a referendum not on Article 136 but on the fiscal compact, which is somewhat different.

My noble friend Lord Dobbs made an excellent speech which I thoroughly enjoyed. The noble Lord, Lord Davies of Stamford, began by saying that he was very happy, which alarmed me, but he soon got on to the unhappy part and seemed to be asking why we were not more part of this system. The implication was, “Why aren’t we in the eurozone?”. I do not think we need argue that out at the moment. We are very glad that we are not in the eurozone.

My noble friend Lord Dundee talked about co-ordination between the Council of Europe and the EU. His work on the Council of Europe has been marvellous and I see what he was getting at, but it does not directly arise from the actual Bill.

The noble Lord, Lord Hannay, is right that I was surprised and delighted—I think that is the phrase—that he gave support. I was all set to debate with him something he said the other night: that he did not understand the concept of network power. I will take him aside on another occasion and explain to him that this is a very important concept. I would like brilliant minds such as his to engage with it to realise how we handle the positions of this country in the future, which is not entirely by relying on the blocs and alliances of the 20th century but by moving on.

There were other excellent speeches, which I must be forgiven for not commenting on in detail, from my noble friend Lord Risby and from the noble Lords, Lord Anderson and Lord Reid. The noble Lord, Lord Reid, particularly echoed a fundamental view put so trenchantly by my noble friend Lord Lawson that this can never fly: that the eurozone is fundamentally flawed and will do nothing but bring more division and difficulty. That is a view but it is not the view of the Government, because we are not sure how things are going to work out. Anyone who claims that they are sure is misleading. We would like to see the eurozone system stabilised in one way or another. We think that there are great dangers for us all in not doing so. How that will be developed and what Mrs Merkel and the German Government will decide about the short-term question of their flexibility in relation to the Greek bailout terms are questions hanging in the air that I cannot answer from this Dispatch Box; and nor, I think, can anybody else. We believe that current events have demonstrated the importance of credible policy action to attempt to maintain and restore market confidence, which is clearly weak. We think now is the time to act. The eurozone has to take some kind of concerted action to sort itself out, and this legislation allows it to take a step in the right direction.

The treaty amendment is very much in this country’s interest. The establishment of the ESM by the eurozone member states will remove the UK’s liability for future euro area financial assistance programmes under the EU budget. Establishing the ESM, with the support of this Bill, will help eurozone member states find the path to the financial stability that in the end they must have. If they fail to have it, it will damage us all. That path to stability will have benefits for the UK and beyond. The ESM is only part of the way forward out of the eurozone crisis, but it is an important and valuable one. I therefore hope that your Lordships will share my views on this legislation.

Bill read a second time and committed to a Committee of the Whole House.