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Banking Union and Economic and Monetary Union

Part of Free School Meals (Children Over the Age of 16) – in the House of Commons at 4:59 pm on 6th November 2012.

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Photo of Greg Clark Greg Clark The Financial Secretary to the Treasury 4:59 pm, 6th November 2012

I and, I think, the country are pleased that the Prime Minister was prepared to stand up for British interests, and I know that he will always do so. It is certainly not a matter of regret.

I think it is desirable from the point of view of the British economy that, since the eurozone exists, it should be successful, rather than a source of economic weakness. Indeed, as the Governor of the Bank of England has said:

“The biggest risk to the recovery” in this country

“stems from the difficulties facing the euro area, our main trading partner.”

Secondly, we need to be vigilant to ensure that our access to the single market in banking, now and in the future, is not undermined and jeopardised by the creation of a banking union. That means putting in place safeguards to ensure that the UK cannot be discriminated against in the future in single market decision-making processes.

The Commission’s current proposals are not yet acceptable in that respect. For example, the European Banking Authority—which, as Members know, is the organisation that currently ensures that there is a level playing field for banking within the single market—operates on the basis not of unanimity but of majority voting. The European Central Bank regulation specifies that that the ECB would

“coordinate and express a common position of representatives from competent authorities of the participating Member States in… the EBA”.

That effectively requires participating member states in the euro to caucus in adopting positions and voting in the European Banking Authority.