MPs back eurozone stability scheme

David LidingtonMPs have backed a scheme designed to prevent another eurozone crisis.

They supported a move paving the way for the European Stability Mechanism (ESM) which, the continent's political leaders hope, will help stop another financial storm engulfing the single currency.
Europe Minister David Lidington said: "It will help eurozone countries work towards stability. Stability in the eurozone is crucial to our own stability in the UK."

A treaty amendment to establish the ESM needs backing from all 27 countries in the European Union (EU), even though only 17 are members of the euro. It will mean richer countries like Germany can support poorer nations such as Greece.

Mr Lidington told the Commons: "It says that the eurozone can support other fellow eurozone members in financial difficulty without contravening their obligations under the EU treaties."

The amendment will not affect Britain because it does not use the euro, but Mr Lidington said supporting the ESM through the European Union (Approval of Treaty Amendment Decision) Bill was in Britain's interests because of trade with the continent. He said: "The ESM will play an important role providing the eurozone with a permanent financial assistance mechanism to assist eurozone member states in financial difficulty."

Shadow Europe minister Emma Reynolds added Labour's support to the Bill, saying: "The ESM is certainly not the silver bullet to solve the eurozone crisis, its establishment is definitely part of the solution and it is exactly the type of action that the OECD has called for."

But Steve Baker, Tory MP for Wycombe, said he feared the eurozone countries were making a terrible mistake.

He said: "The European Union has raised economic nationalism to the level of a continent - it has not abolished it, it has simply raised it to the continental scale just in time to be in danger of a currency collapse. I think this is potentially a dreadful error which our friends in Europe are entering into."

MPs agreed without a vote to give a third reading to the Bill, which has already been through the Lords, and the amendment to the European treaty is due to come into effect on January 1.

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