Stewart Hosie
Main Page: Stewart Hosie (Scottish National Party - Dundee East)Department Debates - View all Stewart Hosie's debates with the HM Treasury
(12 years, 11 months ago)
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Mr Hoban
My hon. Friend will be aware that these are matters for the Greek Government, but I would say this. When money has been lent to the IMF, that does not reduce the amount of money available for public spending. We get interest on the balances that we lend to the IMF, and it has never defaulted on a programme yet. We need to recognise the importance of support provided through the IMF, although I do not really think that my hon. Friend is suggesting that we should withdraw from it. On fiscal consolidation, let me reiterate to my hon. Friends and to the Opposition, who have ignored this crucial fact, that if we had not taken the tough action that we took a year ago in our emergency Budget, it would be the UK, not Greece, in the firing line.
Stewart Hosie (Dundee East) (SNP)
Nobody wants to see Greece default, but that is most certainly possible. Were it to happen, there would be an immediate shock to the eurozone and, more widely, to the EU, our largest trading partner. That would have an impact on the UK. I am glad that the Minister said that the situation was being monitored, but the House and the public deserve more detailed information. If he has not already done so, will he ensure that the Treasury asks the Office for Budget Responsibility to assess the impact on UK growth of a potential Greek default, and publish that assessment quickly, so that we can understand precisely what the consequences might be?
Mr Hoban
The OBR will take into account the state of the eurozone economy in its normal forecasting. However, let me be clear to the House that the Treasury, the Bank of England and the Financial Services Authority work closely to monitor the strength of the financial system, and the exposure of UK banks to the Greek Government and the wider eurozone economy. The actions taken to date have ensured that our banks are well capitalised, have strong balance sheets and are less exposed to the Greek economy than, say, French or German banks. British banks can still access funding in international markets, which is a sign of the UK banking system’s strength.