Lord Howell of Guildford (Conservative), Minister of State at the Foreign and Commonwealth Office, opened the debate reiterating the government's stance that: '...it is vital for Britain's interests that the eurozone resolves its problems.' He outlined the purpose of the proposed amendment to the Treaty on the Functioning of the European Union: 'The proposed amendment makes explicit the ability of eurozone countries to set up a financial assistance mechanism. In other words, it confirms that the eurozone can support fellow eurozone members in financial difficulty.'
The eurozone is in the process of setting up the European stability mechanism (ESM) which will replace the European financial stability mechanism (EFSM) and the European financial stability facility (EFSF). Lord Howell of Guildford explained: 'When the prime minister agreed to the treaty amendment, he also secured an important commitment. The UK will not be liable through the European Union budget for any future eurozone bailouts once the European stability mechanism comes into force.In effect, that is another way of saying that the European financial stability mechanism will be closed down and there will be no further disbursements from that source.'
He continued: '...a stable Europe is directly in the UK's interests...We rely on the eurozone states for over 40 per cent of our trade. London is Europe's international financial centre. Stable progress in the eurozone states is vital to stable progress in the United Kingdom.'
Lord Radice (Labour) welcomed the bill and referred to the select committee report debate on Monday saying: '...much more will be required to solve the euro area crisis than this small bill.' He questioned how Britain when not part of ESM can still help and influence the European Union. He concluded: 'We are a member of the European Union and are affected by what happens. We could show some sympathy but we do not. If we made more of a contribution, we might find ourselves becoming more influential. In this eurozone crisis, which affects not only the member states but the interests of the UK, we are no more than bystanders - we have no real role. If we are prepared to make some positive moves...we might play a more active role which I believe would be good not only for Britain but for Europe.'
Baroness Falkner of Margravine (Liberal Democrat) argued: 'It is clearly and essentially in the United Kingdom's national interest to have the European stability mechanism established as soon as possible, to enable the eurozone sovereign debt crisis to be dealt with through the creation of a permanent mechanism.' She said: 'The bill is a first step to stabilising the crisis, but the European stability mechanism must be accompanied by a pro-growth strategy through faster adjustment. If this results in greater fiscal and political integration, we should accept that that is the right way forward for those countries that have chosen to be in the eurozone. Thankfully, we are not in that position, but that does not mean that we do not have to engage with the developments as they inevitably happen.'
Speakers also included Lord Hannay of Chiswick (Crossbench) a member of the EU select committee and Lord Lamont of Lerwick (Conservative) a former Chancellor of the Exchequer.
European Union (Approval of Treaty Amendment Decision) Bill summary
The bill makes provision for the purposes of section 3 of the European Union Act 2011 in relation to the European Council decision of 25 March 2011, amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for member states whose currency is the euro.
What is second reading?
Second reading is the first opportunity for members of the Lords to debate the main principles and purpose of the bill and to flag up concerns and areas where they think changes (amendments) are needed.
A bill’s second reading usually takes place no less than two weekends after first reading.
What happens at second reading?
The government minister, spokesperson or member of the Lords responsible for the bill opens the debate.
Any member can speak in the debate so this stage can indicate those members particularly interested in the bill - or a particular aspect of it - and those who are most likely to be involved in amending the bill at later stages.
Second reading debates usually last for a few hours but sometimes stretch over a couple of days.
What happens after second reading?
After second reading the bill goes to committee stage - where detailed line by line examination of the bill and discussion of amendments takes place.