EU Constitution

Part of the debate – in the House of Commons at 3:48 pm on 8th June 2005.

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Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 3:48 pm, 8th June 2005

I have an interest in this matter because my constituency includes the largest Irish community in the east of England. Many of those people came to England 20, 30 or even 50 years ago from extremely poor backgrounds and many are now returning to a prosperous country that has done well from its membership of the EU. The situation in Spain is similar; Spain still receives substantial net transfers. On the other hand, countries such as Germany and Britain have to make those transfers, and I shall refer to those contributions later.

More important is having one's currency cemented into a single currency at an inappropriate exchange rate and being unable to change it. The interest rates were too high for the German economy and Germany can do nothing about it. The Germans have even been told to cut their borrowing but that will deflate their economy even further and put it into a worse state. An economic crisis in Germany could give rise to unpleasant politics and if we do not consider that we may have problems. I can quite understand why 56 per cent. of Germans want the Deutschmark back.

Former Chancellor Erhardt, who created the German economic miracle, must be turning in his grave. He was not a socialist but a Christian Democrat who believed in moderate managed capitalism. He would say that the currency is obviously overvalued. He always kept it slightly undervalued to give Germany a competitive edge. That is how the German economic miracle was achieved—by building up a big trade surplus with every other country in Europe. Good business, if nobody notices. That is what Germany did in the past but now it is doing the opposite. Germany cannot solve its problems without withdrawing from the euro, recreating its own currency and adopting a more sensible macro-economic strategy.

The Italians are even further along that route. A member of the Berlusconi Government has called for a referendum on reintroducing the lira. I should strongly support that, albeit from a position on the left rather than from Mr. Berlusconi's Government, with whom I do not sympathise.