European Council

Neil Carmichael Excerpts

Monday 20th December 2010 Commons Chamber

[The Prime Minister]

I would make two points to the hon. Gentleman. First, as I have described, there is the mechanism, which has that headroom. However, eurozone countries should be using the eurozone facility. We do not have a say over eurozone member states’ financial and fiscal policies, so it makes much more sense for eurozone countries to raise that money and subsidise each other if that is what they choose to do. That is what the eurozone facility, which is hundreds of billions of euros, rather than €60 billion, is there to do. I make one other point to the hon. Gentleman: only a limited amount can be done to help countries just by making these transfers. There must be fundamental reforms in those countries, whether that involves cleaning up banks, dealing with labour markets, having more active monetary policies or making their fiscal policies real. All those things will make a difference.

[Neil Carmichael (Stroud) (Con)]

In noting the Prime Minister’s considerable achievements in the European Council, does he agree that it is critical that Britain plays an important role in creating a vibrant, dynamic European economy, so that we can get on with the job of being competitive with the far east and other growing economies?

[The Prime Minister]

My hon. Friend is entirely right, and this also relates to the previous question. Of course, everyone in Europe wants to see higher growth rates. That is one of the ways we will get deficits down and ensure that we have more jobs in our countries. However, Europe needs to ask itself, “How can we get higher growth?” That should be done by completing the single market, extending it to services, taking a more forward position on the Doha round and, frankly, stopping some of the things that the European Union is currently doing that add massive costs and burdens to business. At the European Council dinner, I pressed the point very strongly that unless Europe starts making those decisions, people will not take its growth strategy very seriously.