G20

Lord Jackson of Peterborough Excerpts

Monday 7th November 2011 Commons Chamber

[The Prime Minister]

On the current plan for the recapitalisation of European banks, British banks would not require any additional capital because they are quite well capitalised already. There is a concern that needs to be expressed that as the Europeans move to recapitalise their banks, it is quite important that they do not do that purely by shrinking bank balance sheets, and that they encourage banks to find fresh sources of capital so that lending does not decrease in the European Union.

[Mr Stewart Jackson (Peterborough) (Con)]

Are we not in danger of ignoring the political reality of the current situation, which is that saving the euro at almost any cost is in the long-term interests of Germany, but not necessarily that of the taxpayers of the United Kingdom? That being so, surely the ECB and not the IMF must be the lender of last resort.

[The Prime Minister]

I certainly agree with my hon. Friend’s last point. The point about the future of the euro is that we should take a very hard-headed, national-interest view. All the evidence is that a disorderly break-up of the euro would have very bad effects on all the economies within Europe, and bad effects on Britain. One can make longer-term arguments about what it might mean and how things might change but, in the short-term, there is no doubt that when we are trying to secure growth and jobs in this country a disorderly break-up of the eurozone would not be good for Britain.