Financial Assistance (Ireland)

Lord Johnson of Marylebone Excerpts

Monday 22nd November 2010 Commons Chamber

[Mr Osborne]

An absolute precondition of growth, as we can see in Ireland, is stability, and there is no stability if people put a question mark over a country’s ability to fund itself. One reason why the international assistance package is being put in place is to take the sovereign out of the debt markets for the next couple of years. Quite frankly, the decisions we took in May, in June and last month were absolutely necessary to restore international confidence in Britain’s ability to deal with its deficit and to restore some sanity to its public finances. I find it slightly bizarre, having now had this argument for about a year with Labour Members, that they continue to pursue the belief that we could stick with a set of fiscal plans that no one regarded as credible.

[Joseph Johnson (Orpington) (Con)]

Could the Chancellor say whether he thinks Ireland’s move to tap international financial assistance will reduce or increase the risk of contagion for other euro area sovereigns and their banking systems? What assessment has he made of the risk posed by countries such as Portugal, Italy and Spain to the UK?

[Mr Osborne]

I hope my hon. Friend will allow me not to engage in speculation about any other country at the moment. The package today shows the willingness of the international community, the IMF and so on to help countries that get themselves into trouble, whether they are in Europe or anywhere else in the world.