Hoban: UK 'well placed' to tackle EU crisis

---

The UK is "well prepared for any eventuality" in the eurozone crisis and is making contingency plans, the Commons has heard.

Financial secretary to the Treasury Mark Hoban was responding to an urgent question by Eurosceptic Peter Bone (Con, Wellingborough), who wanted to know what plans the government had in place "for when the euro collapses".

Bone told MPs that Greece should be allowed to exit the euro and take control of its currency.

With chancellor George Osborne in Cannes along with David Cameron, Hoban said it was "vital" world leaders "commit to increased confidence in the global economy" at the G20 summit taking place in Cannes, and agree a detailed plan to tackle the crisis.

He said: "There is no doubt that the decision by the Greek prime minister has added to the instability and uncertainty in the eurozone.

"Ultimately it is up to Greece to make its own decisions.

"But it is critical that all parties stick to the deal that was agreed last week. That agreement is an important part of the economic recovery here in the UK, across Europe and across the global system.

"If the euro-area collectively does not decisively sort out its ongoing problems then the uncertainty that creates and its impact on global confidence will continue to undermine economic recovery across the world.

"This is uncertainty that the global economy can ill afford and uncertainty that has been allowed to drag on all our economies for months."

Hoban added: "At no point have we committed any British taxpayers' money, not to Greece, not to the bailout fund."

On the issue of the IMF, Hoban reiterated the government's position that "there may well be a case" for increasing money available to the International Monetary Fund, however stressed this could not be used solely for a eurozone bailout.

Bone said Greece should be allowed to exit the euro and take control of its currency.

The UK could adjust interest rates and allow sterling to float but "both these powerful economic weapons are denied to Greece as it is in the euro straitjacket".

He pressed the minister: "Can you explain why it is the government's policy to deny Greece a way out of its economic crisis by allowing it to withdraw from the euro and re-establish the drachma?"

Shadow Treasury minister Chris Leslie repeated party calls for an "immediate" plan for jobs and growth in the UK and across Europe.

He told MPs it was thanks to Labour that Britain had not joined the euro.

Leslie said the chancellor must surely regret his claim that the UK is a “safe haven”.

He asked: "When will the government take urgent steps to bolster the strength of our own economy to insulate us properly from this international turbulence?"

"The government continue to play a dangerous ideological game, but it is time that they stepped up to the mark and opted instead for a proper strategy for jobs and growth,” he said.

Hoban refuted the claim that Labour had taken the UK out of the euro, and said the former Conservative government had secured an opt-out from Maastricht Treaty to ensure the country kept out of the single currency.

He added that the coalition had, as soon as it came to office, abolished the euro preparation unit set up by Labour.

Treasury committee chair Andrew Tyrie (Con, Chichester) called for assurance that UK banks’ exposure to both Greece and other eurozone countries will not out the UK at risk.

He asked: "What confidence does he have that the eurozone banks have the capital strength required to withstand a eurozone default?”

Keith Vaz (Lab, Leicester East) said: "George Papandreou is a decent and honourable man. At the end of the day if he wishes to put this to the Greek people this is a matter for them.

"Whatever their decision - and I hope they vote to accept the bail out - we should accept it. This is a country which has voted with us on many, many occasions over the past 20 years."

Bernard Jenkin (Con, Harwich and North Essex) challenged the government's argument that there is a "remorseless logic" of greater fiscal union in the EU.

He warned that such a move would lead to "economic dictatorship", and added: "It will fail and we better be planning for something else."

Stephen Williams (Lib Dem, Bristol West) believed a large number of Conservative MPs "will the destruction of the euro area". He asserted that this was not in the UK's economic or national interest.

Dennis Skinner (Lab, Bolsover) said the situation reminded him of the film "Groundhog Day".

He told MPs: "I was here in the early ’90s with another Tory government, another euro crisis and another prime minister battling for his life—the same players, only this time there are about 40 more Tory rebels. It finished up with a prime minister being kicked out of office."

Gisela Stuart (Lab, Edgbaston) called for a financial transaction tax to "get the eurozone out of this mess".

Responding, Hoban dismissed the idea and highlighted an EU impact assessment which suggested it would lead to lower employment and lower growth across Europe.

Article Comments