European Union Bill

Lord Lamont of Lerwick Excerpts

Wednesday 8th June 2011 Lords Chamber

[Lord Lamont of Lerwick]

My Lords, I think that this is what might be called the Rumsfeld amendment, because it has been moved to deal with the unknown unknowns. That is what it is all about. I had not remotely intended to speak in this debate, but the noble Lord’s enthusiasm is so infectious. He looks at the European Union and sees that nothing has ever gone wrong with it. We ought always to be in there and engaging with it. We must be careful not to miss the train. We must always be positive regardless of what is happening. He tells us about the wonderful speech that Monsieur Trichet has made, saying that we ought to have fiscal union in order to save the euro. No mention is made that that comes out of the ashes of the disastrous ruin of monetary union.

I think it was the noble Lord who used the same arguments to try to persuade us to join the euro. He said that we are losing influence. Even though the euro has now itself faced enormous problems and even though some of my noble friends on the Back Benches have said that we shall never be able to have a single currency area without a fiscal union, we are told, “That is ridiculous. Now fiscal union is just another great step forward. We have got to be positive about it”.

The noble Lord also says that the European stability mechanism is another thing that we are missing out on, and that we ought to be involved in it. Of course, the ESM is in complete contradiction to the whole basis on which the euro was set up. It is not because it was an unexpected disaster—it was a predicted disaster. The reason the ESM had to be created was because the treaties totally forbade it. Yes, we do face some unknown unknowns.

I apologise to the House because we should not all give our own views on Europe, but I was completely provoked by the noble Lord, who seems to be like Alice through the looking-glass: every disaster is seen as a step forward. We just ought to take a step back, hold our breath, and think about it a little.

[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.