2 earlier: Gordon Brown With permission, Mr Speaker, I would like to make a statement on the European Council held in Brussels last Thursday and Friday, which I attended with the Foreign Secretary, and which focused on the intensive economic co-operation needed within Europe and across the world as we follow through the agreements made at the G20 summit and ensure the co-operation needed in economic and environmental policies.
The Council expressed its determination to continue playing a leading role at global level. It called on its international partners to implement fully the commitments made at the London G20 summit, in particular by providing additional resources to international financial institutions and accelerating the reform of the financial and regulatory framework.
Member states have already stated their readiness to provide fast temporary support of up to a total of €75 billion to encourage growth and jobs. The Council also concluded that member states stand ready to take their share of further financing needs agreed by the London summit.
For many months, the UK Government have rightly been at the forefront of proposals to strengthen international regulation. That is why we have taken forward Lord Turner's report. Radical proposals for reform of regulation were also a key outcome of the G20 in London. With so much of Britain's financial sector activities linked to Europe as well as to the rest of the world, and with cross-border investments between the UK and the rest of Europe alone amounting to more than £200 billion every year, Britain needs greater European as well as wider international cross-border supervision. So in line with the recommendations of the reports from Lord Turner and de Larosière, the Council agreed the principles on which a new international framework for the regulation and supervision of financial services in Europe would be delivered.
First, there will be better early warning of financial sector risks through the creation of a new European systemic risk board, which will complement the work of the International Monetary Fund and the Financial Stability Board, and will help to identify problems early and thus prevent future financial crises from developing. Secondly, as proposed by Lord Turner's review, which was itself welcomed by most people in the House, there was agreement to develop a strengthened and more detailed set of European rules for the single market in financial services, with measures to raise the quality and consistency of supervision across Europe, ensure that common rules are enforced, and improve co-ordination between national supervisors; and measures for mediation between the supervisors of institutions with operations in more than one member state. Thirdly, there was a clear commitment from the Council that
"stresses that decisions taken by the European Supervisory Authorities should not impinge in any way on the fiscal responsibilities of Member States."
The principles agreed at the Council provide the foundation for a new financial supervisory architecture with the aim of protecting our financial system from future risks and helping to ensure that the international regulatory failures of the past will not be repeated. The G20 also decided that countries should take similar actions on economic policies, to get through what is recognised by the Leader of the Opposition as a "recession all over Europe".
While the Council acknowledged that the co-ordinated measures taken so far in support of the banking sector and the wider real economy
"have been successful in preventing financial meltdown and in beginning to restore the prospects for real growth,"
it also emphasised the
"imperative...to continue to develop...the measures required to respond to the crisis."
While it is absolutely right that we maintain our commitment to medium-term fiscal sustainability, it is equally vital, as the Council reiterated, that we remain determined to
"do what is necessary to restore jobs and growth."
Recognising the worldwide nature of the financial crisis and that about 1 billion people face poverty, malnutrition or hunger, the European Council also decided that countries should continue to pursue together the millennium development goals, and also co-operate further on the environment.
The Council agreed that
"the time has now come for the international community to make the necessary commitments needed to limit global warming to under 2 degrees",
and that a coherent response to the challenges of both climate change and the economic and financial crisis would, by enabling the move to a low-carbon economy, offer new opportunities for jobs and growth.
The Council repeated its call for all parties to co-operate in reaching an ambitious agreement in Copenhagen later this year, and to accelerate the pace of negotiations at forthcoming high-level international meetings, including the G8 and the Major Economies Forum next month. The Council agreed that both developed and developing countries should contribute finance in the fight against climate change, and that such global burden sharing should be done strictly on the basis of two principles: the ability to pay and the scale of emissions.
When the Council met in December, we agreed that we would seek to provide the legal assurances that Ireland needed to move forward on the Lisbon treaty—that is, on taxation, defence, the right to life, education and the family. But we were equally clear in doing so that there could be no change or amendment to the treaty, only clarification of what it will and will not do. That is exactly the purpose of the guarantees that the Council has agreed for Ireland. To be absolutely clear,
"the Heads of State or Government have declared:
the Protocol will in no way alter the relationship between the EU and its Member States. The sole purpose of the Protocol will be to give full Treaty status to the clarifications set out in the Decision to meet the concerns of the Irish people. The Protocol will clarify but not change either the content or the application of the Treaty of Lisbon",
and that
"its content is fully compatible with the Treaty of Lisbon and will not necessitate any re-ratification of that Treaty".
These guarantees will be set out in a protocol only at the time of the next accession treaty. This will be specific to Irish concerns. Its status will be no different from our own protocols and will be subject to ratification in this House.
On Burma, the Council marked the 64th birthday of Aung San Suu Kyi by expressing its deep concern at her continued imprisonment as the Burmese regime still pursues its contemptible and absurd sham trial. The Council called for her "immediate unconditional release" and agreed that if this does not happen, Europe
"will respond with additional targeted measures"
against the Burmese regime. It is absolutely right that we stand ready to step up sanctions. We will also work with Asia to further increase international pressure. I have talked to the Secretary-General of the United Nations, Ban Ki-moon, and I hope he will be able to visit Burma soon.
On Iran, the Council
"stressed that the outcome of the Iranian elections should reflect the aspirations and choices of the people of Iran."
The onus is on Iran to show the Iranian people that recent elections have been credible, and that the repression and curtailment of democratic rights that we have seen in the past few days will cease.
We, too, have an expectation of Iran—that it meets its obligations as a member of the international community. I hope that Iran will respond to our efforts to achieve a genuine dialogue. It is therefore with regret that I should inform the House that Iran yesterday took the unjustified step of expelling two British diplomats over allegations that are absolutely without foundation. In response to that action, we informed the Iranian ambassador earlier today that we would expel two Iranian diplomats from their embassy in London. I am disappointed that Iran has placed us in this position, but we will continue to seek good relations with Iran and to call for the regime to respect the human rights and democratic freedoms of the Iranian people.
The Council unanimously agreed that it intends to nominate José Manuel Barroso to lead the next European Commission. As we look forward to the next five years, so this Council has put in place some of the building blocks for the future of Europe. It is by co-operating on the basis of our interdependence that we achieve more. By engaging and working in partnership with Europe and globally, we take forward our commitments from the G20 in April. By putting Britain at the heart of Europe, not on the sidelines, with Europe's single market worth over £10 trillion, we in Britain can responsibly deliver security, new jobs, prosperity and a strong future for all our people. I commend this statement to the House.
