European Council

Lord Pearson of Rannoch Excerpts

Monday 20th December 2010 Lords Chamber

[Lord Strathclyde]

My Lords, I certainly agree with what the noble Lord said at the end about Montenegro, which we hope, over time, will be able to play a full part in the European Union. I liked the noble Lord’s characterisation, at the start of his words, about treaty modifications. Of course, what he did not go on to say, when speaking about parliamentary sovereignty, or the primacy of Parliament, is that if there is a substantial transfer of power, we will take it to a referendum of the people of this country. We may disagree about that, but I think that it is a perfectly logical position for us to have.

The substance of the noble Lord’s point was about zero real growth for 10 years. We have proposed that we should reduce growth up until 2014 and that between 2014 and 2020 there should be no growth, or zero real growth, as the noble Lord pointed out. We cling strongly to this view in part because of the difficulties faced by individual member states within the European Union. There is also a sense that over the last few years some of the spending within the EU has not been as carefully controlled as it might have been. This is an opportunity for the EU to review its own budgeting process and I very much hope that it will be supported by other member states in due course.

[Lord Pearson of Rannoch]

My Lords, since it must now be clear, even to our political class, that the euro is designed for failure, with its single interest and exchange rates and its absence of a federal budget, except in extreme illegality, will the noble Lord give a commitment on behalf of Her Majesty’s Government that we will not voluntarily bail out Portugal, Greece, Spain, Italy and Belgium in the same way that we have volunteered to bail out Ireland?

Secondly, have the Government worked out how much it would cost to return Ireland to its national currency? Would that not be the obvious and very cheap thing to do, followed in short order by Portugal, Greece, Spain and Italy? Have they any idea what that would cost compared with the billions that we are throwing down the eurodrain?

[Lord Strathclyde]

My Lords, it is not for us to work out the cost of Ireland or any other country leaving the EU.

[Lord Pearson of Rannoch]

Because it would save us pouring all these billions down the drain.

[Lord Strathclyde]

My Lords, we certainly played a part in the Irish bailout because we perceived it to be in our national interest, whether Ireland was in the eurozone or otherwise, for reasons that the noble Lord knows well.

The noble Lord asked another question: what happens if another country asks for similar support? He went on to list a few of them. There have been no requests for financial assistance from other member states. It is therefore inappropriate for me from this Dispatch Box to speculate on what may or may not happen in other member states given that no request for assistance has been made. The European financial stability mechanism and the European financial stability facility are fully operational. Any request for assistance from a member state would be considered on its own merits.

The noble Lord started by saying that the eurozone was designed for disaster. It is not easy for those who were not in favour of us joining the euro in the first place to make a coherent argument for the euro, but it is in existence. It is in our political and economic interests in Britain for the euro to succeed and that is why we continue to support it.