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EU: Recent Developments

My Lords, I am quite happy to believe everything that the noble Lord, Lord James of Blackheath, has said. I will be very disappointed if the noble Lord, Lord Pearson of Rannoch, is unable to explain how this is all a conspiracy by Brussels. Will the Minister confirm that if you want to buy up the whole world you need a quadrillion? That is the latest figure. This debate began with a presumption that what happened on 9 December was something of a mystery. It remains a mystery. In answer to the question posed by the noble Lord, Lord Kerr, as to why we walked away on that fateful night, I can only assume, because no other explanation has been offered, that in the middle of the night David Cameron’s phone was being hacked into by Rupert Murdoch. The events of that night provided quite useful bulldog headlines for the following day’s newspapers, including the Daily Telegraph and the Daily Mail. The bulldog in question, cited by the chairman of the 1922 Committee, was, of course, Winston Churchill. It is worth quoting against that background of bulldogs from volume 3 of Churchill’s A History of the English-Speaking Peoples, which he wrote in the late 1930s although it was published only in 1956. He said: "““But the Tories were now in one of their moods of violent reaction from continental intervention””." That is where we are at the moment. The noble Lord, Lord Lamont, had sat down when I intervened on him—we all know about the problems with whether you have sat down or not in this place—but I would have asked him a key question. He said that the people of Greece were suffering an enormous cut in their living standard and asked whether they would not be better off outside the euro—I think that that is a reasonable précis of what he said. My question was going to be: what devaluation would not make them even worse off? If the devaluation was by 30 or 40 per cent, would they not be even worse off? Now is not the time for the noble Lord to wish to answer—he looks as if he might spring up, but I think not—but what the living standard of the Greeks will be if they leave the euro is the question. Why they got there in the first place and why we were so tolerant in those days was down to some falsification—although it was not on the scale that the noble Lord, Lord James of Blackheath, referred to—of the accounts in Athens. One reason for the Germans perhaps being over-intrusive now is that we were led by the nose by the Greeks those years ago. I was intrigued by a remark made by the noble Lord, Lord Risby, who said that the single interest rate was never going to work. That is so often said. I disagree and I will say why. If you join at 50 per cent of the average GNI and you remain at 50 per cent of the average GNI, your real wages are 50 per cent of the average GNI. In what sense is it prima facie obvious that you cannot live with that position? Naturally, we hope that countries will improve their relative positions and not deteriorate in terms of their competitiveness and productivity. But I do not think that that has anything to do with the interest rate. As regards falling behind generally, a lot of inaccurate things have been said. I will not personalise this, but there has been so much loose talk about the EU falling behind somebody here or somebody there. We must be consistent in our language. Are we talking about per capita or gross product? In Europe, we are three times bigger than China. If people mean by falling behind that when your children are aged 10 you have fallen behind when they reach 15, well of course you have in relative terms if you are the parents. But it is a ridiculous way of describing falling behind. We have been growing at a lower rate than China and India: that is true. But that is what we spent donkeys’ years trying to do in the international development movement in Africa and Latin America—to make them grow faster. It is a ridiculous objection to make to what has been happening. As regards divergence within the EU, here are all the statistics for 10 years and 20 years, where the median equals 100. It is not as simple as saying that there is the north and the south. There is obviously the east and the west apart from anything else. I will read out some numbers. We begin with 1995 and we cut off at 2010. The median in every year is 100. In 1995, Denmark was 131: the 2010 figure is 127. Germany was 129: the latest figure is 118. Estonia was 36: the latest figure is 64. Ireland was 103: the latest figure is 128. Greece was 84: the latest figure is 90. Those are 2010 figures, which we all know are the latest figures. Spain was 91: the latest figure is 100. France was 116: the latest figure is 108. Italy was 121: the latest figure is 101. I will not go through them all.