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European Union Bill

Would the noble Lord give even just a little bit of credibility to the argument that the problem of different economies sharing the same currency is that the costs of some in the southern part of Europe have gone up 35 per cent while Germany’s costs have only gone up 10 per cent, so they have a big competitiveness problem, which is part of their fiscal problem? In the case of Spain and Ireland, the problem is that they have had a low rate of interest that is unsuitable for their own domestic rate of inflation, causing real interest rates to be negative. That caused everyone to borrow too much and the banks to lend too much, so they have had an overlending problem, in part caused by the fact that they are sharing an inappropriate currency. If they had their own currency, they could devalue when they had such a crisis.