G20

Stewart Hosie Excerpts

Monday 7th November 2011 Commons Chamber

[The Prime Minister]

My hon. Friend makes a very good point. I am not entirely sure what would have happened if we had turned up at the G20 having voted down the deal from the London G20 on increasing the IMF resources. First of all, we would have declined to implement one of the key findings of the last G20, and then we would have turned up and said that we were not prepared to see any increase in IMF funding for anything else. Britain would have been completely isolated and left out. The reason why the Opposition are talking about this is that it is all about the politics and nothing to do with the economics, and they know it.

[Stewart Hosie]

(Dundee East) (SNP): The Prime Minister said that the UK would not fund the EFSF, but it remains one of the eurozone’s most powerful tools, and there are two new powers proposed for it—to insure newly issued sovereign debt, and to spin out investment trusts to buy that debt. Do the Prime Minister and his Government believe that those powers will be enough to leverage the EFSF up to the €1 trillion or so required to give it the firepower that it needs?

[The Prime Minister]

There are still real difficulties with that. The EFSF and the idea of a special purpose vehicle were set out at the eurozone meeting 10 days ago, but the problem is that since then we have not seen enough detail on how exactly those funds would work and how they would be levered up. You need—I have used “bazooka” before—a bazooka big enough to convince people that you will not have to use it, and that is what the eurozone needs to do, but it has not yet completed that work.