Eurozone Financial Assistance

Debate between Stephen Williams and Graham Stringer

Tuesday 24th May 2011 Commons Chamber

[Stephen Williams (Bristol West) (LD)]

The background to this debate is the extreme financial turbulence that took place all around the European Union—and, indeed, around the world—in 2008. Since then, the vast majority of EU member states have become stable. They are growing and have deficit reduction plans in place. It is also important to recognise—I am quite surprised that no one from the Government Benches has said this yet—that the UK has not needed assistance from the IMF nor from the European financial stability mechanism, which we theoretically could have called on from our fellow EU member states, or indeed any bilateral assistance, precisely because the coalition Government have put in place a realistic deficit reduction plan to put our finances on to an even keel. However, other EU member states are still struggling and have needed that international assistance—I refer, of course, to Greece, Portugal and Ireland. Today’s debate is concerned with European Union assistance, but we should remember that many fellow member states have also needed IMF support and bilateral loans, from us and other member states.

[Graham Stringer (Blackley and Broughton) (Lab)]

Is not the reason why Greece, Portugal and Ireland have needed money that they cannot alter their exchange rates or control their interest rates because they are in the euro? Some of those countries are cutting even faster than this Government, and it is not helping. The answer to those countries’ problems is to get out of the euro and return to their old currencies.

[Stephen Williams]

I thank the hon. Gentleman for his intervention. I suspect that I may be alone in the Chamber—at least on this side of the Chamber—in being for the euro. I believe that Britain could have benefited from joining back in 1999, but I none the less recognise that the coalition agreement contains a strong statement on how that is simply not up for discussion during the course of this Parliament. I would therefore agree to differ with the hon. Gentleman. Surely one of the reasons why the three states that he mentioned are unable to deliver deficit reduction is not just their membership of the euro, but the fact that their Governments have not been as willing as this Government to take the necessary painful medicine to put themselves back on an even keel.

We have, of course, made bilateral loans as well, recognising that, as the hon. Member for Orpington (Joseph Johnson) said earlier, it is in our own selfish national interest to support our fellow EU member states. Many of those points were made last year in the debates on the Loans to Ireland Act 2010. One statistic, which I thought was implausible when I first heard it—I have now heard it so many times that it must be true—is that Ireland is more significant to our trade than China, India and Brazil, so it is indeed in our national interest to continue to support Ireland.