Eurozone Crisis Statement

:00:08. > :00:16.was the introduction of the art of fund. Awarding the artist retell

:00:16. > :00:25.rides to dead artists are lapses at the end of this year. Will this

:00:25. > :00:32.The I can confirm that, but I will speak to my colleagues on the

:00:32. > :00:35.impact on the art market and how we will proceed with this. This excess

:00:35. > :00:41.of apprenticeships is no doubt vital to the prosperity of areas

:00:41. > :00:46.such as the West Midlands. Can my honourable friend up to a

:00:46. > :00:53.powerhouse on apprenticeships in the West Midlands? It is a rosy day

:00:53. > :01:03.for the West Midlands, too, because in the West Midlands apprenticeship

:01:03. > :01:11.

:01:11. > :01:21.starts are up by over 50 % on 2009 and 10. We must press on. Statement

:01:21. > :01:26.

:01:26. > :01:31.by the Chancellor of the Exchequer. I wanted to update the House as

:01:31. > :01:36.early as possible on developments in the Eurozone overnight and in

:01:36. > :01:39.the absence of the Prime Minister as he travels to the Commonwealth

:01:39. > :01:43.Heads of Government Meeting. I want to talk about the meeting yesterday

:01:43. > :01:47.in the European Council. The crisis in the euro-zone has caused

:01:47. > :01:52.instability, greatly undermined confidence and is having a chilling

:01:52. > :01:56.effect on economic growth in many countries, including our own. It is

:01:56. > :02:01.in our overwhelming national interest that that courtyard and,

:02:02. > :02:06.comprehensive and lasting solution to the Eurozone's problem is found.

:02:06. > :02:09.For the decisive resolution of this crisis will provide the single

:02:09. > :02:14.biggest boosted the British economy this often won the break-up of the

:02:14. > :02:18.euro would be the single greatest threat to our prosperity. Barbecue

:02:18. > :02:23.and had to solve the problems has been clear, consistent and forcibly

:02:23. > :02:29.expressed. The Prime Minister and I have set out to the House and a

:02:29. > :02:34.number of occasions, reinforcement, recapitalisation and resolution.

:02:34. > :02:40.First Eurozone member states need to reinforce their bail-out fund.

:02:40. > :02:43.Weak European banks need to be recapitalised. The unsustainable

:02:43. > :02:49.position of Greece's debts needs to be resolved. If this solution is

:02:49. > :02:53.the last then the members of the euro need to address the logic and

:02:53. > :02:57.monetary union by pursuing greater fiscal integration within the euro-

:02:57. > :03:04.zone while at the same time protecting Britain's interests. We

:03:04. > :03:10.have to improve competitiveness and a peripheral economies of the

:03:10. > :03:14.Eurozone and competitiveness across the whole European Continent. This

:03:14. > :03:18.is the solution of the crisis we have been advocating for months and

:03:18. > :03:23.the solution once again at the gate to by the Prime Minister at the

:03:23. > :03:27.meeting yesterday. Our view is last night very good progress has been

:03:27. > :03:31.made towards solving the immediate crisis, very good progress on all

:03:31. > :03:37.fronts. The deal put together is much better than was expected

:03:37. > :03:42.yesterday afternoon, but to me - - much detail remains unresolved. We

:03:42. > :03:51.have to keep up the pressure to get the details completed. They have

:03:51. > :03:56.started down the right road, but now they must finish the job. First

:03:56. > :03:59.on recapitalising banks. We are pleased that the European Council

:03:59. > :04:04.agreed to the proposal hammered out by myself and other finance

:04:04. > :04:10.ministers at the weekend. All major European banks will be required to

:04:10. > :04:14.hold the peace and nine percent capital ratio that the end of June

:04:14. > :04:18.next year, including marking to market all of their exposure to

:04:18. > :04:23.sovereign debt. The European banking up our TASS but achieving

:04:23. > :04:26.this target means banks will require an extra 106 billion euros

:04:26. > :04:31.of capital and the council confirmed but this cannot be raised

:04:31. > :04:36.privately, then governments will have to step up. I can confirm to

:04:36. > :04:41.the House that in the assessment of the European Banking Authority and

:04:41. > :04:44.our own at parties, no British bank requires additional capital. This

:04:44. > :04:51.is an important expression of confidence in this country's

:04:51. > :04:54.banking system at a time of global financial stress. European member

:04:55. > :04:59.states also agreed to co-ordinate guarantees of term funding should

:04:59. > :05:03.they be required and we have ensured that state aid rules will

:05:03. > :05:07.be applied properly and European banks will be restructured if

:05:07. > :05:12.necessary just as the European Commission demanded of the last

:05:12. > :05:16.British Government two years ago. While some would have wanted any

:05:16. > :05:20.than tougher banking agreements and more capital going into Europe's

:05:20. > :05:24.thanks, we should welcome what has been achieved by this agreement,

:05:24. > :05:31.unlike the totally inadequate stress tests of last year, we now

:05:31. > :05:35.have a significant of extra resources. The UK and others

:05:35. > :05:38.insisted that their commitment from the whole of the European Union on

:05:38. > :05:43.banking is conditional on the two other key component of the solution

:05:43. > :05:48.to the crisis I set out, are reinforced by a wall and a

:05:48. > :05:53.resolution of great debt. These are matters for the euro-zone, not the

:05:53. > :06:01.UK, and both matters were progress was also made last night. On Greece,

:06:01. > :06:05.a headline agreement was reached its - - reached... for the euro-

:06:05. > :06:08.zone will contribute an additional 30 billion euros and because the

:06:08. > :06:14.British Government has made sure we are not part of the Greek bale-out

:06:14. > :06:18.none of that extra 30 billion will come from a taxpayers'. But private

:06:18. > :06:22.holders of Greek sovereign debt will be asked to accept a nominal

:06:22. > :06:25.write-down of 50 %. A lot more work is needed to put this into practice,

:06:25. > :06:29.including detailed negotiation to the private sector, but we said

:06:30. > :06:33.that the debt of Greece were unsustainable and we are pleased to

:06:33. > :06:38.see a resolution in sight. On reinforcing the size of the fire

:06:38. > :06:43.will the Eurozone have set out to options. One is to preside from the

:06:43. > :06:47.bail-out fund insurance on new debt issued by eurozone countries. The

:06:47. > :06:51.second is to create special purpose vehicles that can attract resources

:06:51. > :06:55.from private and public investors. In their statement, the Eurozone

:06:55. > :06:59.said that the leverage effect of both options will very but they

:07:00. > :07:04.could be expected to yield around one trillion Euros. We have always

:07:04. > :07:09.believed that the role of the European Central Bank is critical

:07:09. > :07:13.of an eye but then the positive statement made by the incoming ECB

:07:13. > :07:18.President. Tocher Special Purpose vehicles has given rise to

:07:18. > :07:25.questions over involvement of the IMF and major shareholders. As I

:07:25. > :07:29.have said to the House, Britain has always been one of the IMF's

:07:29. > :07:33.shareholders and bigger supporters. We helped create the institution 60

:07:33. > :07:36.years ago, the last Government agreed to increase its resources

:07:36. > :07:40.two years ago and this government not only ratified that agreement

:07:40. > :07:44.but also helped to make the IMF more representative of the new

:07:44. > :07:47.world economy by brokering a deal last year the give countries like

:07:47. > :07:52.China and Brazil a greater say while securing Britain's seat on

:07:52. > :07:56.the board. The IMF has been an active participant in the package

:07:56. > :08:03.is put together to support Ireland, Portugal and Greece and it has also

:08:03. > :08:06.been active in extending flexible credit lines to Poland and Mexico,

:08:07. > :08:12.as well as supporting other countries in central and eastern

:08:12. > :08:16.Europe. It currently has 53 lending programmes around the world of

:08:16. > :08:21.which only three are in the euro- zone. Supporting countries that

:08:21. > :08:24.cannot support themselves is what the IMF exists to do and there may

:08:24. > :08:29.well be a case for further increasing the resources of the IMF

:08:29. > :08:33.to keep pace with the size of the global economy and Britain as a

:08:33. > :08:37.founding and permanent member of discovering board stands ready to

:08:37. > :08:41.consider the case for further resources and contribute with other

:08:41. > :08:45.countries if necessary. Let us remember that support for the IMF

:08:45. > :08:51.does not add to our debt or deficit and that no one who has ever

:08:51. > :08:59.provided money to the IMF has ever lost that money. But let me be very

:08:59. > :09:04.clear, we're only prepared to see an increase in the resources of the

:09:04. > :09:14.IMF to all countries of the world. We would not want to see IMF

:09:14. > :09:15.

:09:15. > :09:19.resources used only by the Eurozone. By all means let countries at large

:09:20. > :09:24.firm hard seat reserves like China considered but did - - but in their

:09:24. > :09:29.own money into the Eurozone special purpose vehicle, but that must be

:09:29. > :09:34.their decision. The IMF can only lend to countries of the programme

:09:34. > :09:40.for adjustment. Britain will not be pitting its resources in either. We

:09:40. > :09:46.do not have a surplus, but a very large deficit and it had to use our

:09:46. > :09:50.own resources to recapitalise our banks. An active member of the IMF,

:09:50. > :09:55.yes. Support for the IMF will help them with the advice and technical

:09:55. > :10:01.support, yes. But the IMF contributing to the Eurozone bail-

:10:01. > :10:06.out fund, know. Britain contributing money, no. That is a

:10:06. > :10:10.clear position. We expect the euro- zone members to use the next few

:10:10. > :10:14.days to provide much more detail about their plans to increase their

:10:14. > :10:18.firewall and sort out great debt. We have made it clear that the

:10:18. > :10:22.sooner this happens the better for the whole world economy. We must

:10:22. > :10:26.maintain the momentum, but this package will not buy it some

:10:26. > :10:31.resolve the longer term issues of how to make the euro work more

:10:31. > :10:34.effectively. These longer term issues were addressed yesterday and

:10:34. > :10:39.they included proposals for greater fiscal integration and neutral

:10:39. > :10:44.control over the Budget policies of Eurozone member governments. As I

:10:44. > :10:48.said, I have argued that we need to have followed the remorseless logic

:10:48. > :10:51.of monetary union and that does involve a loss of national

:10:51. > :10:54.sovereignty for countries in the euro-zone. It is in our interest

:10:54. > :10:59.that the euro operate more effectively, provided the interests

:10:59. > :11:03.of all 27 member states are properly protected in key areas of

:11:03. > :11:08.European policy like the single market, competition and financial-

:11:08. > :11:16.services. We are insistent that our boys will continue to be heard and

:11:16. > :11:21.our national interest protected. An important marker was put down on

:11:21. > :11:25.Sunday. No one pretends that sorting this out in a satisfactory

:11:25. > :11:29.way will be easy, but it is a necessity. That is the context in

:11:29. > :11:33.which we should approach potential changes to the treaty. This

:11:33. > :11:37.coalition government has already proved to can protect Britain's

:11:37. > :11:42.interests by getting us out of the last government's involvement in

:11:42. > :11:46.the Eurozone bail-out, holding down the European Union Budget increases

:11:46. > :11:49.are beginning to lot but guaranteed that no further power and

:11:49. > :11:53.competences can be transferred to Brussels without the consent of the

:11:53. > :11:58.British people in a referendum. We will protect the interests of

:11:58. > :12:04.Britain again offered bid discussions of but possible treaty

:12:04. > :12:08.change. Will try to rebalance the responsibilities between the your

:12:09. > :12:11.opinion Union and the member states. Finally, the euro will not find

:12:11. > :12:16.lasting stability until its peripheral members become more

:12:16. > :12:19.competitive. That means credible plans to reduce Budget deficits, a

:12:19. > :12:24.commitment made in the first section of yesterday's agreement,

:12:24. > :12:29.but it also involves difficult decisions on pension ages, business

:12:29. > :12:33.tax rates, welfare reform and educational standards. Britain is

:12:33. > :12:37.not in the euro, but we are taking these difficult decisions at home

:12:37. > :12:40.because the ultimate lesson of this crisis is that unless you can pay

:12:40. > :12:44.your way in the world I compete around the globe then your country

:12:44. > :12:54.will be next in the firing line and I am determined but our country

:12:54. > :12:56.

:12:56. > :13:02.will never be in the firing line. thank the Chancellor for coming to

:13:02. > :13:07.the House today. I am responding on behalf of the opposition. It is

:13:07. > :13:11.good that some agreement has been reached but with so little detail

:13:11. > :13:15.there remained many unanswered questions and I cut the Chancellor

:13:15. > :13:20.can help the House today because what ever happens in the euro-zone

:13:20. > :13:26.will have huge ramifications for British families and businesses. On

:13:26. > :13:30.the recapitalisation of the banks, is he confident that the deal

:13:30. > :13:35.announced is sufficient and that UK banks do not need any further

:13:35. > :13:40.recapitalisation and what he keep that untrue view? What estimates as

:13:40. > :13:48.he made at the exposure of UK banks to Greek, Italian, Portuguese and

:13:48. > :13:50.Spanish sovereign debt? Can he confirm that a House of Commons

:13:50. > :13:56.estimates of $3 billion for Greece and $17 billion for Italy reflects

:13:56. > :14:00.the current position for UK banks? While the agreement says banks and

:14:00. > :14:04.other creditors are invited to accept a 50 % loss on the Greek

:14:04. > :14:10.sovereign debt, is the Chancellor confident that the vast majority

:14:10. > :14:14.will agree and by when? On the expansion of the European financial

:14:14. > :14:17.stability facility, Dulcie believe that the one trillion Euros package

:14:17. > :14:21.as efficient and does it amount to the big bazooka that the Prime

:14:21. > :14:25.Minister talked about earlier this month? Or are we going to be back

:14:25. > :14:30.here again in a few months' time which will mean further uncertainty,

:14:30. > :14:35.undermining confidence, undermining investment and undermined in growth,

:14:35. > :14:39.which is the last thing that Britain or Europe needs? Can the

:14:39. > :14:43.Chancellor explained how the leveraging will work and when does

:14:43. > :14:51.he believe the detail for credit enhancement and Special Purpose

:14:51. > :14:55.vehicles will be finalised? His they eat F S F sufficient and if it

:14:55. > :14:59.must also fund bank recapitalisation will it be

:14:59. > :15:03.sufficient to give confidence to the markets and will there be funds

:15:03. > :15:07.remaining to underpin any sovereign debt crisis and prevent further

:15:07. > :15:11.contagion? While we have a clear economic interest in the euro-zone

:15:11. > :15:15.sorting out its problems, the interests of British taxpayers must

:15:15. > :15:20.be safeguarded. It would have been wrong for Britain to pay twice

:15:20. > :15:24.through put on contemporary you bail-out funds and through the IMF,

:15:24. > :15:29.but if this back it is indeed the final and permanent daylight front,

:15:29. > :15:34.then any British role should be to the IMF alone. I feared the

:15:34. > :15:38.Chancellor's question and answer to himself in the IMF on his statement,

:15:38. > :15:40.but can he clarify what he said on the radio this morning when he said

:15:40. > :15:48.the IMF is not going to put additional resources directly into

:15:48. > :15:51.the Eurozone. Bossy believe that there will need to be a further

:15:51. > :15:56.increase in contributions to the IMF and whether or not he succeeds

:15:56. > :16:06.in persuading them to describe them anything other than a fund is

:16:06. > :16:08.

:16:08. > :16:12.The President of the euro some that will keep non-member states closely

:16:12. > :16:17.informed of the preparation of the outcome of the sum at. Closely

:16:17. > :16:21.informed. Has Britain now has simply been reduced to receiving a

:16:21. > :16:26.postcard from Brussels? How will he ensure that our vital national

:16:26. > :16:32.interest will be helped -- heard a loud and clear in future

:16:32. > :16:37.negotiations? On the forthcoming treaty changes, can the Chancellor

:16:37. > :16:42.Abed what the Prime Minister was unable to do yesterday? Is it the

:16:42. > :16:49.Government's policies to seek to repatriate powers as part of their

:16:50. > :16:54.policy changes? The missing piece in this agreement is the lack of

:16:54. > :17:00.any plans for a jobs and growth. Not mentioned at all in a statement

:17:00. > :17:04.this morning. Without growth, we cannot solve the debt crisis, the

:17:04. > :17:09.banking crisis or the jobs crisis. At this time, Britain should be

:17:09. > :17:14.leading the charge and pushing for a plot -- a proper plan for jobs

:17:14. > :17:18.and growth across Europe. But the Chancellor cannot do that because

:17:18. > :17:24.with unemployment at a 17 years high in Britain and with no growth

:17:24. > :17:28.since last autumn, and so borrowing now set to be �46 billion higher

:17:28. > :17:34.than he planned, he is clinging to an austerity plan which is failing

:17:34. > :17:39.here in Britain. With the you repeat -- the British economy flat

:17:39. > :17:43.lining, and with only Greece and Portugal growing more slowly than

:17:43. > :17:51.Britain, isn't it time we had a plan for jobs and growth across

:17:51. > :17:57.Europe, but also here in Britain? thank the honourable lady for some

:17:57. > :18:03.of for questions. We miss the constructive and consensual

:18:03. > :18:08.approach of the Shadow Chancellor. We're talking about the bread and

:18:08. > :18:18.would institutions, and he is in a place called button would. That

:18:18. > :18:19.

:18:19. > :18:24.adds to their pantomime theme. Let me answer her questions. Four start

:18:24. > :18:31.-- firstly, and British banks, of course we keep the situation

:18:31. > :18:35.regarding liquidity under constant review. We have participated in the

:18:35. > :18:39.recent work by the European banking authority and we thought it was

:18:39. > :18:48.important that this was done at an EU level, rather than a Eurozone

:18:48. > :18:53.level. I repeat what I said in a statement. No British bank requires

:18:53. > :18:56.additional capital, which is very good news for us all. On the

:18:56. > :19:00.question she asks about getting private sector involvement in the

:19:00. > :19:04.right down of greed debt, this is one of the key unresolved issues

:19:04. > :19:09.from last night. We now need to see whether the headline agreement

:19:09. > :19:13.reached on behalf of the private sector can be implemented in

:19:13. > :19:17.practice. I have confidence that it can be. This is one of the crucial

:19:17. > :19:22.next steps that the need to get some of. She asked about the

:19:22. > :19:26.exporters of the UK banking system and the UK economy to areas brittle

:19:26. > :19:31.economies in Europe and these are published regularly by the Bank of

:19:31. > :19:36.England. I do not intend to repeat them today. On the question she

:19:36. > :19:42.asked about the overall fund, the figure of one trillion euros is the

:19:42. > :19:47.number that the eurozone themselves have put forward on their far wall.

:19:47. > :19:51.Some have said it will be larger, but it is significantly larger than

:19:51. > :19:54.what we had yesterday. We should welcome that. As with the private

:19:54. > :20:03.sector involvement in the Greek deal, we now need to see the

:20:03. > :20:10.details as to how they will create this leverage. One is a first loss

:20:10. > :20:12.insurance scheme. The second is special purpose vehicle which they

:20:12. > :20:16.ought to get private investment into an there openly speculating

:20:16. > :20:22.about getting Chinese money into that special purpose vehicle. When

:20:22. > :20:27.it comes to the IMF, they can only lend directly to countries and

:20:27. > :20:32.countries with programmes or flexible credit lines which are

:20:32. > :20:36.agreed. That will remain the case. They cannot lend into this special

:20:36. > :20:41.purpose vehicle. That also be the position of the United Kingdom. We

:20:41. > :20:46.do not think Britain can contribute to the special purpose vehicle,

:20:46. > :20:50.with our deficit. It would add to our debt if we were to do so. We

:20:50. > :20:56.have had to use our own resources to deal with our own problems in

:20:56. > :20:59.this country. Of course, it is crucial that the IMF remains a

:20:59. > :21:08.central economic institution in dealing with the world's problems.

:21:08. > :21:12.I would urge her to reconsider Labour's position on this. I know

:21:12. > :21:18.the honourable gentleman lead the Labour Party in the committee to

:21:18. > :21:23.vote against the increase in IMF resources, which the last Labour

:21:23. > :21:29.Prime Minister negotiated at the London 2009 some at. Whatever I

:21:29. > :21:35.have said about hem, I do not think anyone would doubt that a highlight

:21:35. > :21:39.of his premiership was the negotiation of the G20 deal in 2009.

:21:39. > :21:43.It is astonishing that the Labour Party voted against that agreement.

:21:43. > :21:46.I would urge them, as we have these discussions over the next few

:21:46. > :21:50.months about the IMF and potentially increasing its

:21:50. > :21:55.resources to deal with all the countries of the world, as we have

:21:55. > :21:58.that discussion, I would urge them to reconsider their position on

:21:58. > :22:03.this and reconsider their rather odd position on the euro, would be

:22:03. > :22:11.seen to be holding out membership of the euro, or that is certainly

:22:11. > :22:19.what the Labour leader was doing at the weekend. To be in the euro but

:22:19. > :22:27.out of Siam s seems a rather bizarre policy. -- out of the IMF.

:22:27. > :22:32.A solution to this crisis requires resolving the Greek crisis and

:22:32. > :22:36.dealing ought with the European far wall. There have been two European

:22:36. > :22:39.councils this week and we will continue to argue for the national

:22:39. > :22:43.interests of Britain as we enter into the difficult discussions

:22:43. > :22:52.ahead on potential treaty change and making the euro work, and

:22:52. > :23:00.especially above getting -- especially about making this

:23:00. > :23:04.Continent more competitive and increasing jobs and growth.

:23:04. > :23:09.Following under. The Chancellor made in his last remarks, I am sure

:23:10. > :23:15.he would agree that the debt crisis cannot be resolved without

:23:15. > :23:19.investment in the Eurozone. What evidence has he seen that the EU

:23:19. > :23:25.has the will to implement the necessary reforms on the supply

:23:25. > :23:29.side of the economy to restore Europe's global competitiveness?

:23:29. > :23:33.Well, what I did say to him is there is increasing evidence that

:23:33. > :23:37.people are focused on the structural issues facing the

:23:37. > :23:40.European economy. If he looks at the agreement issued by the

:23:40. > :23:43.eurozone last night, when they are talking about Spain and Italy, they

:23:43. > :23:47.don't just talk about the importance of getting the budget

:23:47. > :23:57.deficits down, but the talk about plans to increase the pension age,

:23:57. > :24:02.to make Labour contribution more flexible. All of those measures in

:24:02. > :24:05.Britain have been appalled by the party opposite. Does he agree that

:24:06. > :24:12.one of the reasons why the bank recapitalisation work three years

:24:12. > :24:16.ago was because we were able to provide the sort of detail to the

:24:16. > :24:21.markets that we were taking necessary action? Can he tell us

:24:22. > :24:27.when we will here how much Greek debt will be written down and which

:24:27. > :24:33.banks in Europe will require additional funds from governments

:24:33. > :24:37.or other sources? Can he also let's know whether or not there is a

:24:37. > :24:42.commitment on the part of the Eurozone to provide real cash in

:24:42. > :24:48.the rescue fund, or is it some sort of complicated financial instrument,

:24:48. > :24:58.of the sort which might have contributed to this sort are off

:24:58. > :25:00.

:25:00. > :25:04.problems in the first play is? in the first place. The European

:25:04. > :25:08.Central Bank was not prepared to provide those resources for many

:25:08. > :25:12.reasons to do with the history of the European Central Bank and the

:25:12. > :25:16.history of other central banks in Europe. They have turned to these

:25:16. > :25:20.options to try to leverage out the money they have already committed.

:25:20. > :25:26.I think that is the sensible choice for them, given those other

:25:26. > :25:31.constraints. There are trying to get other private investors around

:25:31. > :25:34.the world involved to leverage up the fund. Where I completely agree

:25:34. > :25:40.with the right honourable gentleman is that the sooner we get this

:25:40. > :25:46.agreement in detail, the better. This applies equally to what he

:25:46. > :25:56.said about the private sector involvement in the Greek right down.

:25:56. > :25:56.

:25:56. > :26:00.I think a mistake was made in July as the made a deal but took months

:26:00. > :26:03.to implement it. The job is not finished yet. They now have to get

:26:04. > :26:08.the detail, reassure the markets that they have got a grip of the

:26:08. > :26:14.situation, and that is where we will continue to exert British

:26:14. > :26:21.pressure. In what respects does the Chancellor believe that the

:26:22. > :26:27.proposals for a two-tier Europe in the fiscal union do not represent

:26:27. > :26:33.constitutional economic change in the relationship between the

:26:33. > :26:38.European Union and ourselves? if he is referring -- referring, as

:26:38. > :26:41.I suspect he is, to the European Union Act, there are clear

:26:41. > :26:45.procedures in place to establish whether powers or competencies are

:26:45. > :26:49.being transferred from this Parliament to Brussels. Those

:26:49. > :26:57.procedures are clearly set out. I that say it is in our interest that

:26:58. > :27:07.the euro works, and that requires greater fiscal into -- fiscal

:27:08. > :27:09.

:27:09. > :27:18.integration within Europe. The single market and competition

:27:18. > :27:22.policies are issues for all 24/7 members. -- for all 27 members. I

:27:22. > :27:31.remain unconvinced that the euro can survive in its current form and

:27:31. > :27:38.less the weaker countries bring about their own currency and

:27:38. > :27:43.devalue. The honourable gentleman has consistently been making his

:27:43. > :27:48.argument for at least as long as I have been in House of Commons, and

:27:48. > :27:53.longer than that still. I did say he probably takes some comfort from

:27:53. > :27:58.events over the last decade that they have tended to reinforce the

:27:58. > :28:05.views he has expressed. But it is in Britain's interest that we make

:28:05. > :28:10.the euro work. The disorderly break-up of the euro would be an

:28:10. > :28:15.enormous economic blow for this country. 40% cover trade as within

:28:15. > :28:19.the Eurozone. We can only see -- if we set aside the argument which we

:28:19. > :28:23.will have this sort of man next year about the domestic effects of

:28:23. > :28:28.policies we have taken which we would argue promote growth and the

:28:28. > :28:31.opposition argue undermine growth, if you set that aside, everyone in

:28:31. > :28:36.this House will accept that instability of the Eurozone has had

:28:36. > :28:45.a chilling affect on our economy and that of others. Let's imagine

:28:45. > :28:49.what the break-up of the euro would do to our economy. Can he explain

:28:49. > :28:53.to the House what the consequences would have been for our membership

:28:53. > :28:58.of the IMF if those who had voted against the increase in

:28:58. > :29:01.subscription had actually prevailed? It would have been

:29:01. > :29:05.catastrophic. We would have been the only shareholder in the IMF not

:29:05. > :29:10.to have ratified the deal which was initiated at the London G20 summit.

:29:10. > :29:17.It would have completely isolated Britain. We would have either had

:29:17. > :29:22.to leave the IMF or lost our permanent seat on the board. She

:29:22. > :29:27.wants us to get up and leave the table that we are currently at in

:29:27. > :29:31.the IMF's. The Chancellor quite rightly said in his statement that

:29:31. > :29:36.the euro will not work unless countries regain competitiveness.

:29:36. > :29:39.Can he tell us how he thinks that is possible if they do not have the

:29:39. > :29:49.full package from the IMF, which includes devaluing their own

:29:49. > :29:54.currency? Well, first of all, it is perfectly possible for in areas

:29:54. > :29:57.within their monetary union to increase their competitiveness.

:29:57. > :30:02.There are part of the United Kingdom that have improved the

:30:02. > :30:08.record -- relative economic performance over the last 20 years,

:30:08. > :30:12.and also part of the United States. But it is hard work. It requires

:30:12. > :30:19.tackling the very tough issues like labour market reforms, pension ages,

:30:19. > :30:22.tax rates and so on. These are very controversial. The time would say

:30:22. > :30:28.that in countries like Spain, Italy and Greece, people have been

:30:28. > :30:32.confronted by the reality of the need to make change. We will need

:30:33. > :30:36.to see whether they undertake that change, but the IMF is the guardian

:30:36. > :30:41.of the wrong programmes and makes constant assessment of the

:30:41. > :30:45.programmes in Ireland, Greece and Portugal. I would actually say, or

:30:45. > :30:50.boy do not want to be premature, in Ireland, you are seeing quite

:30:50. > :31:00.substantial improvement in the Irish economic performance after

:31:00. > :31:02.

:31:02. > :31:07.the difficult decisions that they The Foreign Secretary once

:31:07. > :31:17.described the euro as a burning building, so why not help our

:31:17. > :31:19.

:31:19. > :31:29.friends out? We have discussed this before and we disagree. What the

:31:29. > :31:36.

:31:36. > :31:41.Foreign Secretary said at that time was that the euro, what I would say

:31:41. > :31:47.is he described the euro as a burning building with no exits.

:31:47. > :31:57.That was the point he was making. At disorderly break-up of the euro

:31:57. > :31:59.

:31:59. > :32:08.this autumn or in the foreseeable future would be a cause an enormous

:32:08. > :32:13.and stability - - the stability. says there is no UK funding going

:32:13. > :32:20.to the Ural bale-out and yet when he talks about supporting the IMF,

:32:20. > :32:26.he says that this was with advice and suggestions only, or is he

:32:26. > :32:35.using taxpayer money to support the IMF? I can he forced the IMF not to

:32:35. > :32:41.use that money for euro be a light? Let me be clear. The IMF can

:32:41. > :32:45.potentially have a role, but this is to be decided, in helping the

:32:45. > :32:48.Eurozone organise its special purpose vehicle, provide technical

:32:48. > :32:53.support and to all the things it is very good at doing, which is

:32:53. > :33:02.stepping in and providing expertise. That is a perfectly legitimate role

:33:02. > :33:06.for them. But what we're saying is there should not be IMF resources

:33:06. > :33:11.going into the special purpose vehicle in terms of a lending

:33:11. > :33:18.programme. The IMF lends money to countries with conditions attached

:33:18. > :33:22.and that is what it should do and the future. So, we are not a

:33:22. > :33:30.supporter, and I don't think the IMF is a supporter of changing

:33:30. > :33:37.those articles. But this will be are against. We are against Britain

:33:38. > :33:41.contributing to the special purpose vehicle. I very much welcome what

:33:41. > :33:45.the Chancellor has said that resolving the immediate crisis in

:33:45. > :33:48.the euro-zone and securing the long-term future of euro currency

:33:48. > :33:56.itself is both in Britain's national interest, but would he

:33:56. > :34:04.agree with the the what is in our national interest is that we remain

:34:04. > :34:10.with them the positive relationship with the eurozone states?

:34:10. > :34:20.absolutely agree that there is a very important role for the 27

:34:20. > :34:22.

:34:22. > :34:25.member states to promote free trades. Also, that the European

:34:25. > :34:29.Union will have a very important role in things like financial-

:34:29. > :34:35.services regulation and it is important that that is discussed at

:34:35. > :34:40.the level of the 27. I completely agree with him and I would say that

:34:40. > :34:45.Britain has been absolutely clear in recent months that issues that

:34:45. > :34:51.affect the 27 should be discussed at the 27, and not at the level of

:34:51. > :34:56.17. It is partly our insistence that there had been to European

:34:57. > :35:01.councils this week to make sure that proper procedures are followed.

:35:01. > :35:04.But Chancellor said that British interests should be properly

:35:04. > :35:09.protected when the euro-zone countries move to giving up

:35:09. > :35:15.national sovereignty and having greater fiscal integration. Can he

:35:15. > :35:20.clarify how that will happen? would say this is the argument of

:35:20. > :35:30.the coming months that we have to make as the discussion starts on

:35:30. > :35:33.

:35:33. > :35:40.whether there will be future treaty changes. We have got to look a go

:35:40. > :35:45.ways of securing our voice and and other members who are not in the

:35:45. > :35:51.eurozone. That is toppled by a Nicosia can engender but we also

:35:51. > :35:57.want to make sure that there is a rebalancing of responsibilities

:35:57. > :36:01.between the European Union and its member states. Does my right

:36:01. > :36:06.honourable friend agree with me them now but the 17 euros some

:36:06. > :36:09.countries have established the precedent of holding their own

:36:09. > :36:13.Euros Sam Obst and have created another President, the President of

:36:13. > :36:18.the euro group, there is a real danger that they will start to

:36:18. > :36:22.agree policies to suit themselves and then impose them on the other

:36:22. > :36:32.10 EU countries who, thankfully, like the UK have not adopted the

:36:32. > :36:32.

:36:32. > :36:40.euro. Were I a agree with him is that we have to be alert to the

:36:40. > :36:46.danger of our caucus of the 17 members of the Eurozone having a

:36:46. > :36:51.caucus on areas that should be the preserve of the 27. When week

:36:51. > :36:57.allowed under the lap - - last Government's that Britain would not

:36:57. > :37:01.be at the euro group there was a fear at the time that the euro

:37:01. > :37:06.group would form a caucus. That has not happened. If anything they have

:37:06. > :37:10.not worked closely enough over the last decade. But he is absolutely

:37:10. > :37:17.right that we need to make sure that the doomed to use a caucus in

:37:17. > :37:24.the future that undermines our boys and influence or that bounces the

:37:24. > :37:27.27 members of the Union. I would say that all countries not in the

:37:27. > :37:32.eurozone are alert to this challenge. Last night the British

:37:32. > :37:39.Prime Minister had discussions with the Polish and Swedish Prime

:37:39. > :37:44.Minister to discuss the issue he - - discuss this issue. In see

:37:44. > :37:49.guaranteeing that no British money will be used directly to the IMF or

:37:49. > :37:58.through any other vehicle? Again guaranteed a British money is not

:37:58. > :38:02.going into the special purpose vehicle. The Chancellor is

:38:02. > :38:07.absolutely right to say that a disorderly break-up of the euro

:38:07. > :38:11.would be a disaster, but as the euro is going to break up, should

:38:11. > :38:17.we take the advice of the honourable member and organise an

:38:18. > :38:26.orderly break-up of the euro? don't think the orderly break-up of

:38:26. > :38:36.the euro could be done in a way that would not lead to a disorderly

:38:36. > :38:39.

:38:39. > :38:43.impact on financial markets and the British economy. Basically what

:38:43. > :38:49.happened was that Greece lied about its finances and Italy is probably

:38:49. > :38:53.still lying about its finances. One of the things it would have helped

:38:53. > :38:58.would have been if there had been independent auditing of this

:38:58. > :39:00.country's finances. Many people a post that, but surely we should be

:39:00. > :39:10.a big hitting it now. The danger for the government is that that

:39:10. > :39:15.applies to all 27 countries, not just 17. Indeed, in this statement

:39:15. > :39:20.said they talk about having independent auditing of finances

:39:20. > :39:26.and independent growth figures upon which to base fiscal projections.

:39:26. > :39:31.That is precisely what we have introduced in this country so you

:39:31. > :39:33.don't get political pressure to alter the growth forecast of the

:39:33. > :39:43.tight that the former Chancellor detailed in his recent

:39:43. > :39:43.

:39:44. > :39:47.autobiography. The 50 % hair cuts has been described as a charge on

:39:47. > :39:52.the banks, but actually Greek sovereign debt is held by insurance

:39:52. > :39:57.companies, pension funds and hundreds of thousands of individual

:39:58. > :40:01.savers. I wonder if you can tell us what is in this package will what

:40:01. > :40:05.measures need to be taken to restore confidence in the sovereign

:40:05. > :40:14.debts, the existing sovereign debt of the peripheral euro-zone

:40:14. > :40:18.countries? The first point he makes is a very good one, but the write-

:40:18. > :40:22.down of Greek debts ultimately does have an impact on people who

:40:22. > :40:26.invested in Greek debts, either directly or more likely when you're

:40:26. > :40:30.looking at the general population through their pension fund and the

:40:30. > :40:34.like. Thankfully British institutions were not that heavily

:40:34. > :40:37.exposed to Greece and its banking system and economy compared to some

:40:38. > :40:42.other European countries like France and Germany. He is right

:40:42. > :40:48.that people will have taken losses. In Britain the institutions he has

:40:48. > :40:53.talked about up all provision for Greek class many months ago, so it

:40:53. > :40:58.won't come as a shock to those institutions. More broadly he asked

:40:58. > :41:07.about confidence in the stock of debt. Of course this is one of the

:41:07. > :41:11.challenges. The first first loss is for newly issued debt and they will

:41:11. > :41:14.have to see at how the special purpose vehicle works as well. In

:41:14. > :41:18.general if there is confidence that there is a sufficient set of

:41:18. > :41:28.mechanisms here to stand behind the euro and countries in trouble, but

:41:28. > :41:29.

:41:29. > :41:38.will increase confidence in the stock of debt. If there are limited

:41:38. > :41:44.treaty changes necessary I think there will be supports on these

:41:44. > :41:49.benches. A real political question, will the Chancellor and Prime

:41:49. > :41:53.Minister be able to withstand pressure from his own backbenchers

:41:54. > :42:00.for more fundamental reform of the treaty? What I would hope is that

:42:00. > :42:04.we would persuade all parties in this House. What I would say is

:42:04. > :42:09.there is strong agreement on the Conservative benches that we want

:42:09. > :42:13.to rebalance the responsibilities and repatriate some powers. The

:42:13. > :42:17.Liberal Democrats and the Liberal Democrat leader has stopped about

:42:17. > :42:21.rebalancing responsibilities and did so earlier this week. The

:42:21. > :42:24.shadow trade tree Minister for seems to forget the position set

:42:24. > :42:32.out by his party leader this weekend which was when he was asked

:42:32. > :42:35.if he felt bustles have too much power he said know. That is the

:42:35. > :42:45.official position of the Labour party going into these because

:42:45. > :42:50.

:42:51. > :42:54.emissions. Can the Chancellor explain to the House how he does

:42:54. > :42:59.come about buckled though the United Kingdom has a deficit this

:42:59. > :43:09.year which is actually larger than that of Greece, our interest rates

:43:09. > :43:12.are similar to those in Germany? honourable friend makes a very good

:43:12. > :43:17.observation that because of the credible fiscal plans we have set

:43:17. > :43:23.out, we have secured confidence in Britain's ability to pay its way in

:43:23. > :43:27.the world and have taken our credit rating of negative watch and we

:43:27. > :43:31.have secured for our country record low interest rates. This interest

:43:32. > :43:36.rates to be at risk if we pursue the policies advocated by the party

:43:36. > :43:42.opposite and it would be a bizarre position to take into this European

:43:42. > :43:45.Council discussions went right at the top of the agreement signed

:43:45. > :43:49.yesterday is the statement that countries of course need to pursue

:43:49. > :43:53.in the words of the agreement, policies of fiscal consolidation

:43:53. > :44:02.and structural reform. They have voted against every single policy

:44:02. > :44:07.of fiscal consolidation and reform. Does he think that the 50 %

:44:07. > :44:15.haircuts will be sufficient and does he expect the Italian debt

:44:15. > :44:22.holders to also made a trip to the barber's? We think that 50 % is a

:44:22. > :44:26.very good number. We had in her own minds some were around 50 % and we

:44:26. > :44:34.wondered whether that was good to be achievable. That was one of the

:44:34. > :44:38.pleasant surprises that happened last night. It is only a headline

:44:38. > :44:42.agreements and that now needs to be put into practice if the Steelers

:44:42. > :44:51.to mean anything. I think it is best for me to stick on talking

:44:51. > :44:56.about Greece. RBS shares have jumped 7% this morning in response

:44:56. > :44:59.to the Eurozone statement. Does the Chancellor share the market's view

:44:59. > :45:04.that British banks are sufficiently capitalised to withstand not just

:45:04. > :45:14.their hair cut to greet debt, but also any other event jollities that

:45:14. > :45:15.

:45:15. > :45:18.might arise in the next few months Yes, I am confident. The Bank of

:45:18. > :45:26.England and the FSA also monitor that closely. The interesting thing

:45:26. > :45:30.about the test which was applied was that its require banks to

:45:31. > :45:40.market the sovereign debt exporters. That had been resisted by the

:45:40. > :45:48.eurozone for the last 18 months. Of course, the market has priced in

:45:48. > :45:54.some haircuts, to continue the barbershop analogy, and the fact

:45:54. > :45:58.that we have now tested our banks against those markets against

:45:58. > :46:05.sovereign debt gives us confidence that the banking system in Britain

:46:05. > :46:15.can withstand whatever is thrown its way in the coming months.

:46:15. > :46:16.

:46:16. > :46:26.some years, I chaired the preparation for the euro committee

:46:26. > :46:26.

:46:26. > :46:31.under Tony Blair. The present Secretary of State for business

:46:31. > :46:36.served. I have some experience in that area. When I am listening to

:46:36. > :46:41.the statement today, it seems to me that since the Governor of the Bank

:46:41. > :46:45.of England has said we RN the worst crisis in the history of the

:46:45. > :46:52.international economy, he is coming over extremely timid about the role

:46:52. > :46:58.of this country in sorting out that talent out. Well, I will have do

:46:58. > :47:03.some through the index of the guilty men by Peter Oborne to see

:47:03. > :47:08.whether there is a reference to the honourable gentleman. There are

:47:08. > :47:12.some references to some of my own colleagues in that book. I have a

:47:12. > :47:19.good alibi. I was writing speeches for the Foreign Secretary at the

:47:20. > :47:29.time, and making it clear what some of the problems were with the euro.

:47:30. > :47:32.

:47:32. > :47:36.Some of those problems have of course come to pass. LAUGHTER. As

:47:36. > :47:40.the Foreign Secretary used to say at the time, he wrote his own

:47:40. > :47:43.speeches. And I write my own speeches today. Those who have

:47:43. > :47:48.ridden my speeches before may have got themselves into the House of

:47:48. > :47:52.Commons, which is a very good thing. What I would say to the honourable

:47:52. > :47:56.gentleman is this. I can put the reject his idea that Britain had

:47:57. > :48:02.been marginal. We have insisted these things are discussed at the

:48:02. > :48:06.various councils. A key component of the announcement today is the

:48:06. > :48:10.banking package. There was at 10 our negotiation which Britain was

:48:10. > :48:14.in the heart of to achieve that banking package last Saturday. We

:48:14. > :48:18.are right at the centre of it. I suspect he agrees with me that the

:48:18. > :48:27.frontbench policy of his own party to marginalise us from the IMF

:48:27. > :48:37.would also see us leaving that he negotiated table. -- that he

:48:37. > :48:40.

:48:40. > :48:44.I cannot confirm that any plans are dead in the water. The eurozone is

:48:45. > :48:49.determined to pursue a financial transaction tax. They talk about

:48:49. > :48:59.that tax in their statement. What I can confirm to my honourable friend

:48:59. > :48:59.

:48:59. > :49:09.is that Britain will not accept the financial transaction tax at an EU

:49:09. > :49:14.27 level. We are not opposed in principle to those taxes, but we

:49:14. > :49:21.will not have a European Union level tax while countries like

:49:21. > :49:29.America and China do not have that tax. I think that is a long way off,

:49:29. > :49:34.if ever. I think it will be a long time before there is a European

:49:34. > :49:38.Union finance will transaction tax. Over the next few years, we are

:49:38. > :49:42.likely to see the emergence a of a two-speed Europe. Parts of the

:49:42. > :49:45.Government will go in exactly the opposite direction. What can the

:49:46. > :49:52.Chancellor and the Prime Minister do to make sure we are not locked

:49:52. > :49:58.out of the fundamental decision is that will be made? Welcome I just

:49:58. > :50:08.told accept the premise of his question. As I say -- well, I just

:50:08. > :50:09.

:50:09. > :50:18.don't accept. We will look at existing competencies, as we

:50:18. > :50:22.outlined in the Coalition agreement. The Labour Party have ruled

:50:22. > :50:32.themselves out of taking any powers back from Brussels to Britain. I

:50:32. > :50:35.

:50:35. > :50:38.suggest that he uses his lobbying powers on he is on party.

:50:38. > :50:43.fundamental cause to the problem has not been addressed and that is

:50:43. > :50:47.a lack of competitiveness. If there is a further downward leg in this

:50:47. > :50:50.crisis, can the Chancellor as sure the House and the country that

:50:50. > :50:55.Britain will not be called upon in any way to help financially with

:50:55. > :51:03.any further rescue packages, whether through the IMF or not?

:51:03. > :51:13.Well, as I have said to the House, Britain should not be part of

:51:13. > :51:13.

:51:13. > :51:22.eurozone bail out. We got ourselves out of -- when we came in to --

:51:22. > :51:28.when it Labour came into office, they committed us to being part of

:51:28. > :51:35.the EU bail out of the eurozone. We have got ourselves out of that.

:51:35. > :51:38.We're not contributing to the eurozone bail out of Greece. Normal

:51:38. > :51:44.be can tit -- contribute to a special purpose vehicle that they

:51:44. > :51:50.create. We are clear on that. When it comes to a IMF resources, as

:51:50. > :51:55.with any countries in the world, we contribute to their resources for

:51:55. > :52:05.programmes that it carries out across the world. We will continue

:52:05. > :52:06.

:52:06. > :52:14.to do so. The articles of the IMF to not allow money for special

:52:14. > :52:17.purpose vehicles. I would think more highly of the Chancellor if he

:52:18. > :52:23.would admit that the last government and the people of this

:52:23. > :52:33.country bailed out there banks and that is why they are more stable in

:52:33. > :52:37.

:52:37. > :52:47.this country. Most economists say the fund will require two trillion

:52:47. > :52:53.

:52:53. > :52:57.Euros. Firstly, I am happy to acknowledge that the previous

:52:57. > :53:04.Government recapitalise the British banks. Obviously under enormous

:53:04. > :53:10.duress at the time. The Conservative Party did not oppose

:53:10. > :53:17.that. We supported it at the time and were advocating it in advance

:53:17. > :53:20.of that happening. I can put a recognise it was a difficult

:53:20. > :53:23.decision for the previous Government to take. When it comes

:53:23. > :53:29.to the size of the fund, of course there are those who would like to

:53:29. > :53:33.see the fund even larger. We should welcome the significant progress

:53:33. > :53:40.that has increased the size of the fund several fold to potentially

:53:40. > :53:46.around one trillion euros. That is a very significant sum of money. He

:53:46. > :53:49.asks an interesting question, which is what is happening in our time as

:53:49. > :53:56.members of parliament to the balance of economic force in the

:53:56. > :54:00.world. I suspect we will spend many years ahead talking about that.

:54:00. > :54:04.am keen to accommodate remaining colleagues, but I remind the House

:54:04. > :54:11.there is a business statement to follow and a significant debate

:54:11. > :54:19.thereafter. So I am looking for brevity. Can I welcome my right

:54:19. > :54:24.honourable friend's approach? Does he agree that the new proposals for

:54:24. > :54:29.Fiscal integration and mutual control in the eurozone does

:54:29. > :54:33.nothing to reduce the case for a rebalancing of responsibilities

:54:33. > :54:41.between the EU are and member states? Yes, I think I can agree

:54:41. > :54:46.with them. -- hem. Can the Chancellor update us on the

:54:46. > :54:54.situation regarding Cypriot banks with their very many UK customers

:54:54. > :55:00.and they're tying -- tie into the Greek economy? Well, of course we

:55:00. > :55:04.not only look at British banks under close surveillance, but the

:55:04. > :55:09.subsidiaries and other branches operating here in the UK. We are

:55:09. > :55:15.closely monitoring the case for a Cypriot banks, as we do for other

:55:15. > :55:20.eurozone banks here and abroad. the Chancellor seen any credible

:55:20. > :55:27.figures which show that Greece can solve its long-term deficit and

:55:27. > :55:33.debt problems and still remain in the year rose on? -- in at the

:55:33. > :55:37.eurozone. I think there are plenty of things that crease can do to

:55:37. > :55:43.make itself more competitive. It is coming from a long way back and

:55:43. > :55:45.there are things it can do with its pension ages, tax rates and labour

:55:45. > :55:50.market that would make it considerably more competitive and

:55:50. > :55:58.it is today. Can the Chancellor please give us more detail about

:55:58. > :56:05.how he intends to represent the UK's interests when it eurozone

:56:05. > :56:08.members have their own separate summits and President? There are

:56:08. > :56:13.already eurozone finance ministers meeting every month. And was agreed

:56:13. > :56:16.by the previous Government. But there will now be two a year

:56:16. > :56:20.eurozone summits of heads of government. I don't think we should

:56:20. > :56:26.regard that as a fundamental threat. We have to allow them to get

:56:26. > :56:36.together to try to better manage their own currency. But we're Clare.

:56:36. > :56:43.

:56:43. > :56:48.We are looking at ideas about summits taking place after other

:56:48. > :56:52.meetings so that there cannot be coppicing. How confident is he that

:56:52. > :56:56.countries like China will want to contribute to the special purpose

:56:56. > :57:00.vehicle and what will happen if the do not a? The short answer is we

:57:00. > :57:04.will find out whether China wants to contribute. The President of

:57:04. > :57:11.France has said that they will speak to the President of China

:57:11. > :57:16.later today. Much to the annoyance of some of his backbenchers, the

:57:16. > :57:22.Chancellor supports greater it -- greater fiscal integration, but

:57:22. > :57:26.precisely what does that mean? think he is being a little unfair

:57:26. > :57:32.to the Conservative backbenchers year. Quite a lot of Euro-sceptics

:57:32. > :57:37.would make the argument, as I would, that we'll was said this is what

:57:37. > :57:43.would happen if we joined a single currency. We always said that you

:57:43. > :57:46.would end up having to lose national sovereignty or give up

:57:46. > :57:52.powers over your budget. That is one of the reasons we didn't want

:57:52. > :57:56.Britain to join. That is why be stayed out. Given that the monetary

:57:56. > :58:00.union logic leads to greater fiscal integration, we should let that

:58:00. > :58:09.happen because I think it would help the euro work better. But

:58:09. > :58:14.Britain wants no part of that. Harlow tax payers will be very

:58:14. > :58:22.relieved that none of their hard- earned money is being used to prop

:58:22. > :58:26.up failed socialist government in Europe. -- Governments. But they

:58:26. > :58:33.will also want to be sure that my honourable friend will do all he

:58:33. > :58:41.can to repatriate powers in Europe, unlike those opposite to believe

:58:41. > :58:47.the garden is rose. He has my assurance that we will seek to

:58:48. > :58:52.rebalance the responsibilities. He draws our attention to the fact

:58:52. > :58:59.that Greece and Spain are run by Socialist government, but I don't

:58:59. > :59:08.want to intrude on their poll tax. Haven't just taken -- their

:59:08. > :59:15.politics. Having just taken the decision to help Greece, what

:59:15. > :59:19.provisions does he suggest that British institutions should make

:59:19. > :59:25.regarding Italian debt? I am not providing that advice across the

:59:25. > :59:28.dispatch box, but we monitor the British financial institutions and

:59:28. > :59:33.make sure that there appropriately prepared for things that might

:59:33. > :59:39.happen. The test that I have been talking about by the European

:59:39. > :59:46.banking authority takes into account a market to market

:59:46. > :59:49.examination of sovereign debt exporters. Can I say to my right