Eurozone Crisis

My Lords, I add my congratulations to the noble Lord, Lord Wolfson, on his maiden speech. He must find it quite appropriate to meet under the presidency of Moses. The noble Baroness, Lady Harris of Richmond, will forgive me, but I think that Moses is presiding up there with some dignity. On that point, I quite like being in this Room. First of all, it has a table which you can put your papers and your elbows on, and I think that we look at each other and pay a bit more attention to each other. That is as far as I can get to anything that could be a consensus, but I was not very good even on that—and I will not have a consensus with the noble Baroness, Lady Wheatcroft, I am afraid. I think that the noble Lord, Lord Lawson, or the noble Lord, Lord Lawson, said at the start that some people never see anything wrong with Brussels and think that everything to do with Brussels is absolutely fine and perfect and so on. We have just heard an example of someone who thinks that anything to do with Brussels is absolutely wrong—it is all awful all of the time. In a strategic line of thinking, we cannot afford a train from Brussels to Strasbourg: that is the big picture. Before I give a bit of current history, or my version of it, I should like to give a bit of a counterfactual, sparked by the advice of the noble Lord, Lord Lawson. The whole project was not proceeded with in the first place; it has disappeared. He said that it was his advice not to proceed with the project in the first place. Let us follow that counterfactual. When we got to 2008, the banks went belly up and we were rescued by Governments, what would have happened? Italy, Spain, Portugal, Greece, Ireland and the UK would have devalued against the deutschmark and the guilder et cetera. The deutschmark would have shot up in value, choking off German exports. The debate today would have been about the future not of the euro but of the single market. Chancellor Merkel was recently criticised for making some general allusion to the history of the European project, going back to the outcome of the war with the cementing of good relations, no more wars and so on. It was grossly overinterpreted by people. Even the single market would have broken up, there would have been an indefinite cycle of devaluation and the pressures for protectionism would soon have reasserted themselves. There was of course some resentment at the UK’s devaluation in 2008. Many others were doing it. Essentially, that resentment would have given way to anger. I mention Chancellor Merkel and will make a prediction, putting my money where my euros are. People say that she cannot make a U-turn on the European Central Bank or find some other way of getting out of where we are now. I would say that that is not the correct question. She has a choice of two U-turns. She has to do that U-turn or a U-turn about the survival of the euro. I would put my money on her doing a U-turn on the ECB since she will not do one on the survival of the euro. That is where I would put my few thousand euros. In that connection, Chancellor Merkel does not need any lessons from David Cameron along the lines of, overall, being very tardy and so on. I agree with my noble friend Lord Liddle about how the German political dynamics move—the rate of them and so on. Simply saying that we must protect the City of London as the Hong Kong of Europe sounds quite like special pleading. To extrapolate along those lines, there is China, which is a funny sort of democracy to be compared with. If you extrapolate the arithmetic of the noble Lord, Lord Lamont, and look at the numbers he gave us, Europe is twice—if not three times—the size of China. We cannot be in and out of any fiscal arrangement at the same time so far as the City of London is concerned. By the way, I saw in the Evening Standard the other day that many involved in the short-selling of the euro had had their fingers burnt so they are giving up on that. You might say that this is not the correct week to say that but I am not inventing it; you can look it up yourselves. We have to recognise that we are all in this together, to coin a phrase. The noble Baroness, Lady Valentine, spoke about promoting London. I have to say that every speaker from the City should feel an obligation to say what their recommendations will do for the rest of Britain—for Burton-on-Trent; all the workers in the rest of Britain in the manufacturing sector, which does not have the export base that Germany has; the research and development which we need; and so on. Otherwise, that looks like special pleading just for London, which is what she is paid for—but that is what it is. The noble Lord, Lord Lawson, made the point about a united states of Europe being still the mirage or the aspiration of many of us. I have the greatest admiration for the noble Lord, as he knows very well, but I do not think that that shibboleth should be used. The European Union has always been sui generis. It is a very unusual, unique animal. It does not even have four legs; I do not know how many legs it has got, but it is not like any other animal. There is something fallacious about comparison with any other animal. If President Obama finds it difficult to talk to it, that is just a problem with which we have to live. In my last minute, I should like to talk about the reference made by my noble friend Lord Monks to contempt for democracy. ““Hang on a minute””, I say to myself, ““do people want petrol tax?””. They probably do not. ““Do they want income tax?”” They probably do not. ““Would they vote for value added tax?”” They probably would not. These are things for general elections because you have to look at the costs and the benefits. I am sure that the noble Lord, Lord Lawson, having run the Treasury, would agree. If one wants to play around with the word ““democracy””, who elected the merchant banks? If we want to throw around points of semantics—