European Central Bank: President (Hansard, 27 November 1997)

§ Lord McIntosh of Haringey
My Lords, the Maastricht Treaty makes it clear that only member states which are participating in EMU are involved in the appointment of the president of the European Central Bank.

§ Lord Renton of Mount Harry
My Lords, I thank the noble Lord for that reply. Can he then confirm that, as long as we are out of the economic and monetary union, we shall not have a British member of the six-man executive body; we shall have no representative on the governing council; nor, if the article by the French Finance Minister in today's Financial Times is to be believed, shall we have any representative on the informal council in which first-wave EMU members will co-ordinate their economic policy? Under those circumstances, is it not really a danger for Britain that, as long as we are not in the European Central Bank, we shall suffer from decisions of that bank which will affect us, while we shall have no part in the making of those decisions?

§ Lord McIntosh of Haringey
My Lords, I can certainly confirm that as long as we are not members of EMU we shall not be members of the executive board or the governing council. The noble Lord is ahead of me in his reading of the Financial Times. My understanding is that the general council exists to cover both the "ins" and the "outs" and covers relationships between the two, and also that we shall be represented on that council. As regards the question of what decisions are being taken, a great number of them are already either incorporated in the treaty or have been taken by the European Monetary Institute, of which we are members.

§ Lord Mackay of Ardbrecknish
My Lords, while I appreciate that the Government do not intend to join the euro at this stage and that they will not have any say in who will become president of the European Central Bank, perhaps the Minister can share with us whether in general terms, if the Government were in a position to influence the matter, they would prefer a German banker who believed in sound money or a French banker who did not.

§ Lord McIntosh of Haringey
My Lords, that is a good try, but I am not in any way going to respond to the noble Lord's invitation to me to exhibit xenophobia. As I understand it, the choice is not between a German banker and a French banker, but between a Dutch banker and a German banker.

Lord Bruce of Donington
My Lords, is the noble Lord aware that in any event the question is to some 1085 extent academic because the real decisions are taken every month, a fortnight before every Council of Ministers' meeting, by France and Germany meeting under the provisions of the Franco-German Treaty of 1963?

§ Lord McIntosh of Haringey
My Lords, I am constantly being tempted. I have been tempted into xenophobia and now I am being tempted into a conspiracy theory. I shall not follow my noble friend down that road.

§ Lord Peston
My Lords, I am sure that the question is neither xenophobic nor one of conspiracy. The noble Lords, Lord Mackay of Ardbrecknish and Lord Renton, put their fingers on something which is of fundamental importance to this country. Therefore, is my noble friend aware that if what they say has any remote connection with the truth— and I believe that it does—there are enormously serious consequences for this country in our laggardness in getting involved with EMU? Those of us who try to be as supportive as we can of the Government are placed in great difficulties when we see the most important decisions facing this country, of which we have just had a very good example, still being left to others and we revert to what has always troubled us—namely, our propensity to complain in the future about things we could do something about now.

§ Lord McIntosh of Haringey
My Lords, in terms of the original Question, I believe that our inability to take part in the choice of the presidency of the European Central Bank is a relatively small price to pay. But of course my noble friend is perfectly entitled to widen the debate and I always enjoy it when he does. We have taken the view, which was reported to Parliament and debated there on 27th October, that there are sound economic reasons—notably the need for sustainable economic convergence—which make it impossible for us to join EMU at the outset.

§ Lord Jenkins of Hillhead
My Lords, is the Minister aware that if Europe is run by a Franco-German partnership, as the noble Lord, Lord Bruce of Donington, alleges, it is not due to any treaty of 1963 but to the persistent detachment of Britain, which he so strongly advocates, but which I hope—not yet with total confidence—this Government are in the process of correcting?

§ Lord McIntosh of Haringey
My Lords, I have no intention of getting involved in a debate between the noble Lord and my noble friend Lord Bruce of Donington. As regards the more important matter which the noble Lord, Lord Jenkins, raised, I am delighted to hear, because I believe he is right, that we are showing a very different attitude towards Europe from that of our predecessors. We are the first Government to say that there are no constitutional bars to our membership of European monetary union and that we intend to enter it in due course.

§ Viscount Waverley
My Lords, the UK presidency comes at a crucial moment where a spare seat by rotation could be considered. Can the Minister say whether it is wise to have the influence of politics over single currency monetary authorities, which would arguably impact its credibility? If so, what measures can be introduced to deflect such a circumstance?

§ Lord McIntosh of Haringey
My Lords, I am not entirely sure that I understand the noble Viscount's question. If he is referring to the executive board or the governing council of the European Central Bank, it is indeed open to those bodies to keep spare seats available at the outset. But we have no indication as to whether or not they intend to do so.

Noble Lords
Next Question! Lord Longford! Order!

§ The Lord Privy Seal (Lord Richard)
My Lords, we took nearly nine minutes on the first Question. We have now reached 16 minutes and I believe that we should move on.