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My hon. Friend makes an interesting point. If regulation is dealt with at a European level, there is the risk that in the process of the binding mediation outlined in the documents, in a conflict between how supervisory authorities interpret the regulations, the ESAs could intervene, through that mediation, and create another fiscal impact. This is a complex area. I do not think that the Government have got their red lines in the right place, and they are certainly not defending them as vigorously as we would have hoped, given the conclusions reached in the June Council.
"We recommend that the Regulations provide proper protection for the fiscal position of Member States. It needs to be far stronger than the current provisions. We do not understand why the Commission has departed so far from the ECOFIN conclusions of June this year and we insist that UK Ministers do not agree to any of these provisions until the fiscal sovereignty of the UK is protected by a veto."
That is a very robust statement and recommendation by the Select Committee. Two distinguished Committee members are here this afternoon, and I am sure that they will stand by it. It is difficult to see, however, how the Government can say that their red line has been recognised in the architecture if they do not achieve that veto.
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