Tom Blenkinsop
Main Page: Tom Blenkinsop (Labour - Middlesbrough South and East Cleveland)Department Debates - View all Tom Blenkinsop's debates with the HM Treasury
(12 years, 11 months ago)
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Mr Hoban
My hon. Friend is absolutely spot on in his analysis. I believe that the 10-year gilt rates fell to 3.2% at the end of last week, which reflects the markets’ vote of confidence in the UK economy and particularly the fact that we took the difficult decisions that the Labour party shied away from when they were in government. We took those decisions, which is why the market rates are similar to those in Germany, yet our deficit is more in line with that of Portugal.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Can the Minister give an assessment of what effect a Greek default will have on the German and French economies, which are more exposed to such a default, and in turn on UK manufacturing?
Mr Hoban
The hon. Gentleman is right to say that German and French banks have a greater exposure to the Greek sovereign debt than the UK banks do. The French exposure is, I think, four times that of the UK, while the German banking sector’s exposure is about five times ours. That is why it is important that, as we go through the process of stress testing European banks, we look very carefully at the level of capital that our banks hold to ensure that they are in a position to withstand shocks and thus to support and sustain the economy.