On Tuesday afternoon, MPs in the House, including myself, debated a Motion which stated “That this House notes with concern that UK taxpayers are potentially being made liable for bail-outs of Eurozone countries when the UK opted to remain outside the Euro and, despite agreement in May 2010 that the EU-wide European Financial Stability Mechanism (EFSM) of €60 billion would represent only 12 per cent. of the non-IMF contribution with the remaining €440 billion being borne by the Eurozone through the European Financial Stability Facility (EFSF), that the EFSM for which the UK may be held liable is in fact being drawn upon to the same or greater extent than the EFSF; notes that the European Scrutiny Committee has stated its view that the EFSM is legally unsound; and requires the Government to place the EFSM on the agenda of the next meeting of the Council of Ministers or the European Council and to vote against continued use of the EFSM unless a Eurozone only arrangement which relieves the UK of liability under the EFSM has by then been agreed.”
The Government’s position on eurozone bailouts is about the integrity of the Coalition and has nothing to do with the national interest. The Liberal Democrats and elements in the Conservative Party at a high level are quite prepared to allow further European integration when there are alternatives to renegotiate the Treaties or to say ‘No!’ and they are simply not doing so. This is all about numbers – not about principle or even policy. I have pursued this issue of the eurozone bailout for about a year and have put down many questions and received evasive and in some cases untruthful answers.
Why should the British taxpayer – and why should hospitals and schools in times of austerity – in any way underwrite what goes on in Portugal or indeed any other country in the European Union?
It is nothing to do with Qualified Majority Voting because completely contrary to the assertion made by the Government minister in his reply to me today, the controversial Article 122 cannot possibly be used to support the EFSM. The Government knows it, everyone knows it. It is not compatible with the Treaty and the minister is wrong. He refuses to give the legal advice or any advice he was given and it is a disgrace.
It is not just me or the European Scrutiny Committee that said this is “legally unsound” or unlawful. Madame Lagarde herself said "We violated all the rules because we wanted to close ranks and really rescue the euro zone."It remains a stitch up of the British people in order to maintain so-called solidarity for further integration of a failing European project.
Why are the people protesting and rioting all over Europe – Madrid, Greece, Italy, the list is growing but the European economy is not? The reason for the bailout is because there is no growth in their economies and the Coalition Government cannot deal with that because the Liberal Democrats have silenced the Prime Minister’s promise to repatriate burdens on business. It is called 56 votes and the keys to Number 10.
The consequence is disturbing for the economy because the justification for the Coalition is reducing the deficit but we cannot tackle the deficit without addressing growth and whether it is Portugal or Spain or Greece, the oxygen for enterprise is stifled, small businesses are strangled, young people cannot be employed throughout the whole of Europe because companies will not take them on because of European employment regulations and the deficit and the public sector cannot be stabilised without the tax revenues from the small businesses who are being deliberately destroyed by a refusal to repeal the small business legislation which strangles them.
In the meantime, Germany has unit labour costs of a mere 2%. The average for the rest of Europe is between 25 and 30% and therefore impossible for other countries to compete with the BRICs, whilst Germany invests in cheaper labour markets in Europe, with 67% of all its trade with Europe and 45% of all European trade with China being German.
All this has to be renegotiated as Michael Stürmer, Chief Correspondent at Die Welt argues, the dream is over and the Maastricht Treaty has to be revised. But there is no will to do so and the European bailout of Portugal is a symptom of this deeper problem – of appeasement, a lack of political will and a failure of the Government to lead the country out of this current catastrophe which is deepening and widening at the same time. There will be further riots and protests at the same time. The Government is contributing towards instability throughout Europe while claiming that bailing out German and French banks and Portugal and Greece within the time frame of 2013 is itself a means of achieving stability which is not only wrong but utterly irresponsible.
This debate is driven by the Whips on the instructions of the Prime Minister and at the behest of those so blinded by the politics of the Coalition that they cannot see what is in the national interest. There are conflicting statements as to what the Chancellor of the Exchequer said in May last year in his discussions with the outgoing Chancellor but we are told he did not agree. If so, there is no conceivable excuse for challenging the matter in the European court and the Motion I mentioned above should have succeeded on that account alone because the illegality will have led to the abandonment of the EFSM.
I warned the Prime Minister before he entered into the Treaty for the European Stability Mechanism itself (operant from May 2013) that he could use his veto to bring forward the new Mechanism in return immediately for the repeal of the EFSM which wrongly involves us in our national debt and imposes unwarranted liabilities on our taxpayers. This whole saga is a violation not only of common sense but of principle and the interests of not only the Conservative Party but the national interest itself.
I could not possibly support an amendment which is merely a device for a cover up for the real problem we face, namely that the Coalition driven by the Eurofanaticism of the Liberal Democrats, is put before anything else, even at the expense of our own economy and the impact all this has on Europe as a whole and Britain in particular.