Lord Dykes
To ask Her Majesty’s Government when they will next meet other European Union member state Governments to discuss the December 2011 Eurozone agreement.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, two meetings of the ad hoc working group on the fiscal stability union, in which the UK is participating, have been held so far. The first was on 20 December and discussed general views on the draft international agreement on a reinforced economic union and the practical arrangements for the preparatory work. The second meeting, on 6 January this year, discussed the proposed provisions in the draft agreement, particularly those relating to consistency and relationships with the law of the Union and fiscal issues. The ad hoc working group plans to hold a minimum of a further meeting a week.
Lord Dykes
My Lords, I thank my noble friend for that Answer. As the Liberal European leaders gave such good advice over the weekend, what is the coalition response to the points that they made, including the vital point about whether there should now be a full EU treaty?
Lord Howell of Guildford
The views expressed by the group to which my noble friend has referred were of course very interesting and coincided broadly with what we all accept: if, as the Deputy Prime Minister rightly said, the UK’s interests are properly and fully safeguarded, then eventually this could emerge as a European treaty. However, at the moment that is not the position, as my right honourable friend the Prime Minister had to make clear in the December Council, where it was plain that our interests were not safeguarded. Until that matter is resolved, it is difficult to see how this can become a full European treaty.
Lord Soley
Can the Minister explain what the Deputy Prime Minister meant when he said that the agreement would be folded into existing treaties, and does he think that that could be done with or without a vote, as has been suggested by the Government?
Lord Howell of Guildford
I understood the Deputy Prime Minister to say that the UK would want to make sure that the basic building blocks of the single market—namely, a level playing field upon which competition takes place—are properly safeguarded. It is a question of safeguards. I think that the meaning of what is said by anyone who applies a constructive approach to this whole situation is that, if there is to be a fiscal union treaty and it is to go forward in a way that the whole European Union can support, it will have to safeguard the issues that we regard as vital to our national interest, which means preserving open competition and preventing further discrimination against our financial services. That is what all who have applied their mind to this issue agree is the right way forward.
Lord Hannay of Chiswick
My Lords, can the Minister possibly say what provisions of the draft agreement which have been discussed in Brussels are objectionable to the British Government and prevent them signing?
Can the Minister also give me an answer to the question that I put to the Leader of the House after the 9 December meeting? Why did the British Government abandon the tried and trusted approach of the noble Baroness, Lady Thatcher, in the Milan European Council and the one before the Maastricht negotiations started, of making clear certain objections but also making clear that she would make up her mind whether or not to agree only at the end of the negotiating process?
Lord Howell of Guildford
I shall take those questions in reverse order. Unfortunately, one of the leading voices at the December meeting—namely, the French leadership—made it absolutely clear that there would be no acceptance of the safeguards which my right honourable friend the Prime Minister was seeking. I refer not to safeguards to give special protection to existing interests but to safeguards against further intrusion and further discrimination against interests, which would have affected Britain in particular but other countries as well.
I do not think that the noble Lord will be surprised to hear that we do not publish informal draft text proposals. He may not like that but that has been the practice for a long time and it continues to be the practice, particularly when those taking part are in the middle of negotiations.
Lord Tebbit
My Lords, does the doctrine of collective responsibility apply in these matters?
Lord Howell of Guildford
Broadly, yes—but occasionally with some flexibility, particularly in the coalition, which I know my right honourable friend strongly supports.
Lord Barnett
Does that reply mean that the Deputy Prime Minister has indicated to the Prime Minister that he will have his full support at the next Council meeting at the end of the month, as after the previous meeting he initially indicated his support for the veto even though he now says it stopped nothing—as it did not?
Lord Howell of Guildford
One can trade many words on what occurred at the December Council, but certainly something was stopped: namely, the proposal that there should be a pan-EU, 27-member amendment to the Lisbon treaty. That was stopped by my right honourable friend when he found that the safeguards he sought would not be available and that new intrusions on, and discriminations against, open competition were to be put in place. No doubt what emerges in the future will be developed in a constructive way and, I am sure, will have the full support of my right honourable friends the Prime Minister, the Deputy Prime Minister and all members of the coalition Cabinet.
Lord Pearson of Rannoch
My Lords, do the Government agree that the Greek, Spanish, Portuguese and other people would not be suffering as they are if it were not for the misguided project of European integration, complete with its ruinous euro? Has not the time come for the eurozone to abandon the euro and for all its members to return to their national currencies in an orderly fashion, complete with their own exchange and interest rates? Is that not the only sensible way forward?
Lord Howell of Guildford
The frank and sensible answer given by much higher authorities than me to the question, “Has the time come?” is, “We do not know”. As far as the situation of the Club Med countries is concerned—this applies in particular to Greece, which is having great difficulties in its debt restructuring—we hope that they will achieve it but we do not know, and we are not at all sure whether the necessary measures are in place to meet that short-term need. The broader issue of the fiscal stability union is aimed at the longer-term attempt to make sure that the eurozone is not constantly vulnerable to future crises. However, in the short term, if I told the noble Lord that I knew exactly what would happen, he would not believe me—and he would be right.
Lord Teverson
Does my noble friend agree that it is important in European economic and financial affairs, as it is in personal and social affairs, that one is seen not to snub one's friends, particularly when one might need their help in future?
Lord Howell of Guildford
I have to agree with that general proposition. As far as I am concerned, no snubbing went on. The UK sought to protect its interests and the integrity of the European Union treaty. We will continue to work both for our interests and for the stable and orderly development of EU economies generally. That will require a lot of co-operation but certainly will not require the UK, for instance, to join the eurozone, and no snubbing is involved in saying that we would rather stay out of it.
Lord Triesman
My Lords, I understand the Minister's difficulty in answering some of these supplementary questions. There may not have been 27 countries that took a different view, but there were 26. One reason was that there was little diplomatic contact before the event to discuss it. Indeed, the Minister will find that the officials in his own department lamented the fact that they were not tasked with engaging diplomatically in advance of the December meeting. What can the Minister say about a positive programme of re-engagement to engage and repair relationships—because unless those relationships are repaired the prospects for us having a substantive input are very small?
Lord Howell of Guildford
Words such as “repair” are overdramatised. We are involved in the ad hoc working group and participating not just as observers. We want to see the eurozone crisis resolved in an orderly way for the obvious reason that implosion and disorder on the continent of Europe would undermine one of our chief markets. We are working very closely with our colleagues and the relationships and involvements continue as before. To dramatise this as a tremendous break and imply that Britain is isolated and marginalised is to falsify the position. On the contrary, we are in a very strong position and are anxious to see the European economy recover.