The UK and the Eurozone crisis

Here in Poland, public attention is understandably focussed on EURO 2012, not the Eurozone crisis. Poland’s 1-1 draw with Russia was a classic game and leaves open a real chance for Poland to qualify for the Quarter Finals. But the tournament will end on 1 July while the Eurozone crisis with its continuing impact on both the UK and Poland will not. Both our countries are outside the Eurozone but have the Eurozone as our main trading partner. So we have every interest in an early resolution of the crisis as British and Polish ministers have repeatedly stressed.

Where does the UK stand on the EU and resolving the Eurozone crisis?

It is in the UK’s interests for the EU to be effective, credible and prosperous. EU membership is in our national interest too.

We want an outward-looking EU that is more dynamic and competitive globally. This is essential in a world where wealth and power is shifting to emerging economies. EU countries need to reform to stay competitive and grow. We support a multi-faceted EU, where members can work as now in informal or more formal groups like Schengen as necessary, with the flexibility of a network not the rigidity of a bloc.

A satisfactory outcome to the Eurozone crisis will mean an evolution towards a tightly-integrated Eurozone within the EU’s current structures. Although the UK will not be a part of Eurozone integration, we will not stand in the way of further political integration among the Eurozone countries that any successful solution will require. But it is critical for the UK and Europe as a whole that Eurozone integration does not work against non-Eurozone EU Member States.

Let’s be clear. The fate of the Eurozone matters hugely to the UK. The risks of a disorderly outcome are huge. Resolving the crisis would do more than anything to boost our economy. This is one of the main things on George Osborne, the UK Chancellor’s (Finance Minister’s) mind, and he spoke on this subject too last night LINK. We are supportive of the principle of the Eurozone banking union. Mutualisation of fiscal risk and common supervision make sense. But we don’t need this for the single market. So we won’t be part of it. The single market does, however, requires robust regulation of the financial sector through the EU. Eurozone integration raises questions about how the single market and the single currency fit together. It is important that the integrity of the single market is not affected. The detail of a banking union, as well as of protecting the single market, will need careful thought.

Growth too is vital to get Europe’s economy going. We need to reap the economic benefits of completing the Single Market and to ensure Europe remains open for trade, not least by making progress on Free Trade deals with countries like Japan, the US, Canada, India and Singapore. Now is the time to push forward a positive, liberal trade agenda, not erect new barriers which will restrict options for growth.

Naturally, the UK and Poland do not agree on every aspect of EU policy but we share a belief in the importance of the EU growth agenda and the key role of the single market and we will continue to engage together actively and closely at this crucial moment for our mutual economic wellbeing.