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Eurozone

Oral Answers to Questions — Foreign and Commonwealth Office – in the House of Commons at 2:30 pm on 19th June 2012.

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Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons) 2:30 pm, 19th June 2012

What recent discussions he has had with his European counterparts on the eurozone crisis.

Photo of Karl Turner Karl Turner Labour, Kingston upon Hull East

What recent discussions he has had with his European counterparts on the eurozone crisis.

Photo of William Hague William Hague The Secretary of State for Foreign and Commonwealth Affairs

My ministerial colleagues and I have regular discussions with our eurozone and European counterparts. It is in the UK’s interests to have a stable eurozone, the countries of which must do all they can to stand behind their currency.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

How do the Government seriously think they can influence the debate about jobs and growth in Europe, when their own failed austerity programme is leading to record joblessness and £150 billion added to the national debt?

Photo of William Hague William Hague The Secretary of State for Foreign and Commonwealth Affairs

We might be drifting away from foreign policy, Mr Speaker. The fact that the United Kingdom has its safe haven status, with the lowest interest rates in our history, is an important point that the hon. Gentleman ought to remember. When our Prime Minister put his name to the letter ahead of the March European Council, along with 11 other Heads of European Governments, calling for measures to stimulate growth—improving the single market, free trade agreements with other nations and removing barriers to business—it received a strong endorsement from many European nations. Clearly we influence the debate very strongly.

Photo of Karl Turner Karl Turner Labour, Kingston upon Hull East

I hear the Foreign Secretary’s response to my hon. Friend, but yesterday the Prime Minister gave what is becoming his all-too-familiar speech to eurozone countries. Does the Foreign Secretary agree that reciting the same old platitudes is a poor excuse for leadership? Is it not time for a plan for jobs and growth?

Photo of William Hague William Hague The Secretary of State for Foreign and Commonwealth Affairs

The Prime Minister is fully entitled to say what he believes should be done, as are many other world leaders at the G20. There is no reason the UK should be unable to give its views about what should happen in the eurozone, given that the United States and many other countries are free to do so. The eurozone economies have an important effect on our economy, and what is happening there is having a chilling effect on our economy, so we are fully entitled to give our views, as well as to show strong leadership in controlling and bringing down the excessive deficits left to us by the Labour party and in having a safe haven status that is the envy of much of the rest of Europe.

Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee

My right hon. Friend is a great historian as well as Foreign Secretary. Does he accept that the eurozone crisis is not only a eurozone crisis but a European Union crisis, and political, economic and democratic in nature? Given that it affects the daily lives of 450 million people in Europe, has the time not come for a convention, not of the kind held last time, but one based on the principles of democracy and the defence of the British nation?

Photo of William Hague William Hague The Secretary of State for Foreign and Commonwealth Affairs

I will go so far with my hon. Friend, as usual, but not all the way, as usual. I absolutely agree that the crisis is having a major effect not only on those in the eurozone but more broadly, and that it is having major political as well as economic ramifications. As for drawing together, in whatever form, reflections on the future of Europe arising from the crisis, however, it would be better to do that when one can discern how the crisis will end and progress and develop over the coming months.

Photo of Jo Johnson Jo Johnson Conservative, Orpington

Many residents in Orpington work in financial services and make a big contribution to the success of this country’s biggest export sector. Can the Secretary of State say what safeguards the UK financial services sector might need in the event of steps towards banking union in the eurozone and fiscal compact countries?

Photo of William Hague William Hague The Secretary of State for Foreign and Commonwealth Affairs

Safeguards will certainly be needed—my hon. Friend is quite right to raise that—but as things stand proposals and ideas about banking union take many different forms. Many people mean many different things by “banking union”. If such proposals are made more tangible and specific, we will set out the specific safeguards that we think we need for the single market. We are already making the case in European capitals that in the event of a banking union in the eurozone, which, by the way, we will certainly not be part of—let me make that absolutely clear—such safeguards will be necessary.

Photo of Douglas Alexander Douglas Alexander Shadow Foreign Secretary

I am intrigued by the apparent complacency of the Foreign Secretary’s most recent answer. Given the Chancellor’s advocacy of greater integration in the eurozone, would the Foreign Secretary be willing to set out for the House what legal or political safeguards for British businesses and exporters the Government will be proposing at next week’s European Council?

Photo of William Hague William Hague The Secretary of State for Foreign and Commonwealth Affairs

The Chancellor has set out exactly what we think should happen. For the eurozone to be successful, it is necessary to have more support from stronger economies, to help weaker economies adjust; more pooling of resources, whether through common eurobonds or some other mechanism; a shared back-stop for the banking system, to strengthen banks and protect deposits; and, as a consequence, much closer oversight of fiscal and financial policy. That is what we believe the eurozone needs to do. However, if it were to adopt measures that affect—or may affect, in any way—the ability of the single market to operate effectively and in the interests of this country, we will need the safeguards for which we are already making the case. Once we have specific proposals, we will set out those specific safeguards.

Photo of Douglas Alexander Douglas Alexander Shadow Foreign Secretary

If President Hollande is successful at next week’s European summit in securing agreement for a jobs and growth package, will the Prime Minister support his new-found best friend in this endeavour or will the Government stick to their failing austerity-alone approach, which has delivered a double-dip recession here in Britain?

Photo of William Hague William Hague The Secretary of State for Foreign and Commonwealth Affairs

The Opposition might need to take a closer look at some of the things that President Hollande is advocating, because he is saying that France must balance its budget by 2017. He is also saying that growth cannot come from state spending and that it must be reined in—to use his words—so perhaps the Opposition might care to decide whether they truly support the words of President Hollande.