Greece — House of Lords, 2015-06-29
Topic: International Affairs
Thomas Ashton (Conservative, Centre-right): My Lords, I thank the noble Lord and the noble Baroness for their comments. I shall start with the initial remarks of the noble Lord, Lord Davies. I shall just refer back to what the Chancellor said, because I do not see any part of the Statement where he compared this country to Greece. He said: "If ever we needed a reminder of why we need to continue working through our plan to deliver economic security at home" Economic security at home is extremely important to deal not only with the obvious problems in Greece, which are not the same as we have here, but the other, unexpected problems that occur in the worldwide economy The noble Lord and the noble Baroness asked about British citizens. Of course, that is one of the most important issues as far as we are concerned. Greece is a big tourist destination, with 150,000 tourists normally going there in July. The Foreign Office updated its information both last night and again, I think, within the last hour. All British citizens should look at the information from the Foreign Office on the GOV.UK website because the situation is developing fast and that is the best way to get up-to-date information. The Foreign Office has been dealing with the Greek authorities and I can answer the noble Lord opposite directly: it has undertaken contingency plans to make sure that if the situation gets worse, adequate support will be provided for UK citizens in Greece and it will ensure that adequate resources are available I was asked what structures are in place in this country to monitor the situation. The Bank of England has primary responsibility for stability and is looking at this on a daily basis. The number of firms that deal with Greece is relatively minimal. The financial sector has reduced dramatically over recent months, with the latest figures for March showing that exposure levels were approaching a quarter of what they were in December last year. By way of comparison, they comprise less than 2% of the UK’s financial exposure to France. Direct trade and investment links are also minimal, with only 0.6% of total UK goods and services exports going to Greece—worth around £2.8 billion in 2013—while only $1.1 billion of Greek foreign direct investment stock comes from the UK. In fact, of all the periphery euro area economies, Greece receives the smallest amount of UK outward foreign direct investment I agree with the noble Lord opposite that a negotiated settlement is preferable. I also agree that the Government here will do whatever they can to help in that. They have been in touch with European institutions, but, obviously, as we are not part of the eurozone, we have less influence in this matter. But I agree with him that a negotiated settlement would be best. I have to bear in mind what the president of the IMF said: it is time to have some adults in the room when they get to negotiations The noble Baroness, Lady Kramer, asked about cash, which obviously is a risk. I think that it is sensible to take more cash than you would normally take. One could also take more than one card, if one has them. Of course, the problem is that those cards are no good if the banking system is not working and the ATMs have run out of cash—and I think that they will run out of cash fairly soon. She mentioned travellers’ cheques. Again, they are only any good if the banking system is open and working. Hotels, I think, fairly rapidly run out of cash The noble Baroness asked about the stress tests and the banks in this country. I cannot answer directly whether they involved a specific reference to a situation like Greece, but all our banks have passed their stress tests. These take into account instability in the economy, which is one of the tests—and the banks passed. There is much less contagion risk in the periphery than there was a few years ago. Countries such as Spain and Italy have reduced their exposure to Greece as well—it is not just this country. As for the discussions with the bank regulator, the Bank of England—the regulator in this country—has talked to other European institutions The noble Baroness said that this was a soluble problem. I think it is soluble with good will on both sides, but it will be very difficult. The performance of some of the players has made that more difficult, to be frank. On reform generally and the effect that this will have on our negotiations with the EU, I do not agree that ever closer union is a synthetic issue. When you have a eurozone, ever closer union is an absolutely important part of that. That is a real issue we have to address, and the Prime Minister is determined to do so.