EU Council

Lord Davies of Stamford Excerpts

Tuesday 31st January 2012 Lords Chamber

[Lord Strathclyde]

My Lords, if those were his motivations, there would be nothing wrong in that. In fact, the Prime Minister made it entirely clear in response to questions and in his Statement on the December Council that his only aim was to preserve British interests. At the December Council, he asked for certain safeguards and those safeguards were not offered. Hence, we have got to the current position.

As the noble Lord knows extremely well, we have a number of legal concerns about the treaty, particularly on the use of the EU institutions, but, as I said, it is in our national interest for the eurozone to solve its problems. That is why we are reserving our position. I know that the noble Lord, Lord Hannay, asks my noble friend Lord Howell questions from time to time. He will have an opportunity to have another go in a couple of weeks’ time, when we are having an all-day debate on the European Union.

We will be watching developments very carefully over the next few weeks and months, and if there is any sign that they will encroach, particularly on the single market, we will seek to take appropriate action.

[Lord Davies of Stamford]

My Lords, it is at least reassuring that the Prime Minister now appears to be conducting our diplomacy in the EU in a cool, calm and reasoned fashion, although it is very worrying that we shall not, apparently, even be in the room as observers when the 25 meet regularly from now on.

However, I sincerely congratulate the Government on their contribution to the achievement of the single market conclusions of the Council, particularly in relation to energy. I hope that there will be follow-through and implementation.

If Greece defaults, which it may, there may be contagion. If there is contagion, there would be a very serious banking crisis. In those circumstances, it would be extremely expensive for us to bail out our banks. Would it not be much cheaper now to make a more modest contribution to the new financial stability fund, the IMF or otherwise to the firewall which we keep nagging our European partners that they should be putting together without us, up to now, being willing to contribute at all?

[Lord Strathclyde]

My Lords, it is not my role, nor that of the Government, nor is it appropriate to speculate on the position of Greece. Greece has to make its own decisions on that question. Our view is that it is important that all parties should stick to the deal agreed in October and that all the elements of that package, including the PSI, are finalised and implemented without further delay. We are not contributing directly to more bailouts of the eurozone, as the noble Lord knows. One thing that we agreed earlier through the new ESM is that we are extracting the United Kingdom from having to pay for eurozone bailouts in future. IMF payments are of course an entirely different matter, but we believe that the IMF is there to lend support to a country, not to a currency.