Greece — House of Commons, 2015-07-06
Topic: Macroeconomics
George Gideon Oliver Osborne (Conservative, Centre-right): I last updated the House on the situation in Greece a week ago. Since then the Greek Government have failed to make the International Monetary Fund payment that was due, and the Greek people expressed a decisive view in yesterday’s referendum and rejected the creditors’ terms. Greece is a proud nation and a very long-standing ally of the United Kingdom, and we respect the decision of its people, but there is considerable uncertainty about what happens next. We need to be realistic: the prospects of a happy resolution of the crisis are, sadly, diminishing Over the past 24 hours the Prime Minister and I have spoken to some of our counterparts, I have spoken to the head of the IMF, and just a few minutes ago I spoke to the chair of the Eurogroup. We are urging all sides to have a final go at trying to reach an agreement that defuses the crisis. The next steps are the European Central Bank discussion taking place right now, tonight’s Franco-German summit and tomorrow’s gathering of eurozone leaders. If there is no signal from those meetings that Greece and the eurozone are ready to get around the table again, we can expect the financial situation in Greece to deteriorate rapidly. For now, the British Government’s position remains the same: we will do whatever is necessary to protect the UK’s economic security at this time This morning, the Prime Minister chaired a meeting attended by the Governor of the Bank of England, myself and other members of the Government to review our response to the ongoing crisis. So far the financial market reaction has been relatively contained, private sector exposures are far less than three years ago, and the eurozone authorities have said that they stand ready to do whatever is necessary to ensure the financial stability of the wider euro area. But the risks are growing, so it is right that we remain vigilant and monitor the situation carefully. I am in regular contact with the Governor to oversee developments as they unfold We are also acting to protect British residents and holidaymakers in Greece. Last week, I told the House that the Department for Work and Pensions and public service pension administrators had started contacting Greek residents who draw a British state pension or public sector pension from a Greek bank account. I can now confirm that the DWP has spoken to 2,000 people, advising them on how to switch payments to non-Greek bank accounts if they wish. It has now enabled people in Greece who receive a UK state pension to set up a UK bank account if they do not already have one. International payments into Greece are still exempt from the restrictions that the Greek authorities have placed on the banking system, so I can confirm today that UK Government payments, including state pension and public service pension payments, will continue to be made in the usual way We are doing more to keep holidaymakers and residents informed about the developing situation. We are in regular contact with the travel industry, to understand the impact on British nationals; we have increased the number of Foreign Office staff in our embassy in Athens, to be prepared for whatever happens; and on the islands of Crete, Corfu, Rhodes and Zakynthos, where many British tourists are and where we already have a vice-consular presence, we have deployed more consular staff to support the teams there. But it is unrealistic to think that we can provide a consular presence on all the Greek islands, which is why we urge everyone travelling to Greece to look at the travel advice before they go. It is clear that British holidaymakers should take sufficient euros in cash to cover the duration of their stay, emergencies, unforeseen circumstances and any unexpected delays. Travellers should be careful and take sensible precautions against theft As the economic crisis in Greece persists, there are greater risks of shortages. In recent days the media have reported a shortage of medical supplies in Greece, so I reiterate the Foreign Office’s advice on its website that UK travellers take sufficient supplies, including prescription medicines, for the duration of their trip. We will continue to ensure that the travel advice is regularly updated with the latest information, and our ambassador in Athens will provide regular updates on the UK response in Greece Finally, we have put in place measures to support British businesses. HMRC’s time to pay arrangements are now open to help businesses that are experiencing cash-flow problems as a result of banking controls in Greece. Under the leadership of my right hon. Friend which Business Secretary, the Department for Business, Innovation and Skills has published detailed guidance to help businesses; it can be found on the Government website. Businesses that are experiencing problems with Greek contracts can call the business support helpline which will direct them to commercial lawyers with experience in the Greek market, or they can contact their Member of Parliament and we will help provide direct advice. The Minister of State for Trade and Investment met major UK companies and business groups last week to discuss the situation, and he will have further meetings this week This is a critical moment in the economic crisis in Greece, and no one should be under any illusions. The situation risks going from bad to worse, and Britain will be affected the longer the Greek crisis lasts and the worse it gets. There is no easy way out, but even at the eleventh hour we urge the eurozone leaders and Greece to find a sustainable solution. Here in Britain we must redouble our efforts to put our house in order. In the Budget in two days’ time, I will set out exactly how we will do that.