Yesterday Lord Howell introduced the European Union (Approval of Treaty Amendment Decision) Bill to Parliament, as outlined in Her Majesty’s Speech earlier this week.
The purpose of the Bill is very straightforward. It simply provides for Parliamentary approval of a Treaty change which makes explicit the ability of eurozone countries to set up a European Stability Mechanism or ESM so that they support fellow eurozone members in financial trouble.
Although the UK is not in the eurozone, the Treaty amendment is important to us. When the Prime Minister agreed to the Treaty amendment at the European Council in March 2011 he also secured agreement from all EU members to a commitment which means that the UK will not be liable through the EU budget for any future EU eurozone bailouts once the ESM comes into force. Ratifying the Treaty amendment is an important part of that deal and this Bill is part of that process.
The ESM will be funded by the eurozone, for the eurozone and will play an important role in EU-wide efforts to bring financial stability to the Eurozone. A stable Eurozone is directly in the UK’s interest – growth there will help growth here. After all, we rely on the Eurozone for over 40% of our trade.
You can find further information on the Bill on the Parliament and FCO websites.