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

Lord Risby Excerpts

Wednesday 23rd May 2012 Lords Chamber

[Lord Risby]

My Lords, I may not be able to cheer your Lordships' House up particularly, but I may do so by saying that this speech will be very brief. This Bill may not be ground-breaking or contentious, but it is worth reminding ourselves why it is of some value. All member states’ parliaments must approve the proposed Amendment 136 to the Treaty on the Functioning of the European Union, but legislation approved by an Act of Parliament last year, the European Union Act 2011, enhances our democratic oversight. This Bill does not involve directing powers from the UK to the European Union centrally, so no referendum is required. I hope, therefore, that all of your Lordships can reflect on how important last year’s legislation was, given the current turmoil in Europe and the real future possibility of substantial structural or even constitutional changes in the EU which will most certainly affect us.

We may be out of the eurozone, but we cannot escape our geography or the economic and other links with our continental neighbours. We have to respond carefully and thoughtfully to the political and economic crisis that has descended on our continent. We do not know how this will work out, given the current disagreement within the eurozone, and although I cannot foresee what constitutional implications there may be for us, at least now either our Parliament or, if necessary, our people, will have greater opportunity to take greater ownership of any such possible process. Meanwhile we have to encourage and even at times assertively suggest ways forward to our European neighbours to find a solution to their crisis. Agreeing to this short Bill would at least get us out of future direct liabilities and allow the eurozone members to create a larger mechanism: the European stability mechanism. It seems to me desirable for all the EU states, in or out of the euro, to put this change through our Parliament and all theirs. However limited in the circumstances, it is at least a small and partial although important responsible reaction to current difficulties.

In a speech two days ago in your Lordships' House my noble friend Lady Williams of Crosby reminded us of the hugely comprehensive and all-embracing process to fulfil the Copenhagen criteria for EU membership. Nothing remotely comparable was ever laid out for eurozone membership, and to the extent that there were national budgetary constraints they were almost immediately flouted. If, indeed, a new eurozone fiscal pact emerges and there is the inevitable reduction of national sovereignty, I hope that the use of referendums that enables us to debate this appropriately and seek voters’ approval becomes much more widespread. I say that because the Lisbon treaty, which finally emerged out of the constitutional convention, has not succeeded in dealing with the main injunction of the Laeken declaration, which is to try to close the democratic deficit which we now see under so much pressure in the European Union today.

In the end, politicians in all democratic European countries will make their ultimate judgments based on their own domestic constituencies. Mrs Merkel’s position is perfectly understandable; it accurately reflects the view of her citizens, who see themselves as being punished, potentially, for their frugality and economic success. We ought to remind ourselves that many Germans paid, within living memory, a very high price for the unification of their own country, and many of their citizens remember this. Ultimately, you cannot buck the market. You cannot have a single currency with each member state with very different levels of competitiveness all paying hugely differential rates to service their debts.

The economy of Greece, so badly managed, cannot charge its adoption of the euro as the basis of its problems. The problems were certainly internally generated. In order to resolve their problems the Greeks have to contemplate the possibility of leaving the eurozone. Of course that course presents difficulties but I suspect that it is the lesser of two evils.

The most important thing now is that all key strategic decisions should be taken soon as regards exactly who will remain in the eurozone—if that is to be the course—and what new fiscal arrangements are to be put in place. Frankly, as long as those problems remain unresolved, everyone in Europe will suffer. At least in Britain, however, any possible anger or frustration felt by our people about the impact from our neighbours will be offset by the fact that at least we know that we will have a say on any possible constitutional change. I suspect that many of our fellow European citizens would like eventually to have the same opportunity, at a time of febrile social tensions in many parts of Europe arising from this wholly predictable crisis which is affecting the lives of millions of our fellow Europeans. Regrettably, it has begun to shake the very democratic underpinnings of the European Union itself.