My Lords, in thanking the noble Lord, Lord Newby, for so cogently introducing this debate, I don my hat as chair of the sub-committee of your Lordships EU Select Committee which concerns itself with economic and financial affairs and trade. We are dealing with a number of reports on financial stability. We look forward to the noble Lord, Lord Sassoon, responding to our report on sovereign credit rating agencies and a further report on the new EU financial supervisory framework under three new EU supervisory authorities. Our current inquiry is looking at how a single mortgage market might be established throughout the European Union. A future inquiry will look at the topical financial transactions tax. Among our regular scrutiny items are the EU prudential regime and the reaction to Basle III and CRD4.
However, the most important reports that we have produced recently, in March this year, was on the future of economic governance in the EU and the euro. We are now producing a follow-up report, which involved interviewing Sharon Bowles, the excellent chair of the European Parliament's Economics Committee, and the German Ambassador Boomgaarden. On a cultural point, the ambassador spoke absolutely fluent English and showed a grasp of British history that I do not think any British spokesman or politician could match if they were to address a German crowd in such a way.
In considering the future of economic governance in the EU, we looked at the Commission's proposals for the so-called "six pack" in achieving enhanced economic co-ordination. We think that it is going in the right direction. We believe it is essential that the political authorities of the EU take that seriously and abide by the rules. That is even more true of the situation now than it was when we first published our report in March. The UK has a strong interest in seeing the euro area stable and prosperous. The European Stability Mechanism, which in 2013 will take over the tasks carried out by the EFSM and the EFSF, will be compulsory only for members of the euro area. However, we recognise that it might be in the UK's interest to contribute to rescue packages for member states in difficulties, as happened with Ireland. Our follow-up inquiry looks at what fiscal union might look like and includes a consideration of euro bonds, the implications for the European Union and the UK of the Greek default and the write-downs of Greek debt, the role of the EFSF, the case for recapitalisation of European banks and the position of United Kingdom banks.
I doff my chairman's hat and return to the other side of this matter-the growth aspects. I rebut the notion of the noble Baroness, Lady Noakes, that our interest is different from that of the European Union. The two interests may well coincide. I encourage the Government to stop deluding others regarding some of the good work that they do. We should not disguise the fact that we had a self-interest in helping out Ireland. When we contribute to the IMF fund, we should not say-as the Chancellor did-that we are just one of 80 countries that have done so. We have a purpose in supporting the IMF and we may need to do the same with the ESM in the future.
The noble Lord, Lord Newby, spoke of the problem that will emerge for us if we find that more and more of the European Union 27 member states join the euro, as they are destined to do. Three countries in the western Balkans already attach themselves to the euro. We may be like the children at birthday parties in the Harrison household who always wanted a place at the bottom of the table, away from where all the adults sat. We may end up at that table, supping with a couple of others who are excluded from the adult conversation taking place higher up the table.
Finally, the secret to growth-I was interested to hear the comments of the noble Lord, Lord Giddens, in this respect-is the single market. In this we can find a political consensus. As the noble Lord, Lord Hannay, has illustrated, if we secure the single market it will bring the prosperity, growth and jobs which we can all enjoy.