The House of Lords European Union Committee has today published its report on the euro area crisis. The Committee agree with the Government that the optimum outcome from the December European Council meeting would have been an agreement on a new treaty to deal with the crisis signed by all Member States that protected UK interests.
As this did not happen, the Committee express regret that the Government has not published its safeguards the Prime Minister sought at the December Council and call on them to do so. The Committee states that there is a risk that the shift of discussion from the main EU Channels to forums where the UK has no voice risks marginalising the UK's influence in Europe over time.
In the Committee's view the UK, the other Member States, and the EU institutions must find a way to secure fiscal integration for the euro area states while at the same time protecting the integrity of the single market as an engine of economic growth for all 27 member states of the EU.
The proposed treaty raises a number of legal issues, which the Committee examines in detail. The proposed treaty states that it is intended to be folded into the main EU treaty framework, following a review of experience with implementation. This would give the treaty much greater legal certainty, and the Committee can see no reason in principle why this should not happen in due course.
The Committee also considered the role of the European Central Bank following its role in refinancing European banks and state that further intervention is likely to be necessary to preserve the functioning of credit markets within the EU. The Committee call on euro area states to decide whether the introduction of 'Eurobonds' will be necessary.
Commenting Lord Roper, Chairman of the House of Lords EU Committee, said:
"The Government's decision to opt-out of the agreement in December was based on a belief that the proposals threatened British interests. However, the Government has not told us exactly what protections it sought in the treaty negotiations.
Without this it is impossible for Parliament and the public to make a balanced judgement on the decision and we call on the Government to publish those details.
The situation in the euro area crisis is complex and changing rapidily. National governments and the EU have struggled to keep up with events. Improved budgetary discipline is important but in the longer term delivering sustainable growth will be vital. We are very concerned that the potential for the single market to help to deliver that growth is being overlooked."