News story

Prime Minister's statement on European Council

"Last week's European Council discussed further economic and monetary integration for the Eurozone"

Mr Speaker, I’m sure the whole House will join with me in sending our deepest sympathies to President Obama and the American people following the desperately tragic shootings in Connecticut on Friday.

Our hearts go out to the families and friends of all those involved.

Mr Speaker, last week’s European Council discussed further economic and monetary integration for the Eurozone.

It endorsed new safeguards that will protect the interests of those countries outside the Eurozone.

It also reached new conclusions on our response to the crisis in Syria. And there were discussions on growth and defence.

This was the seventh European Council of the year. It was in no way a landmark council. So let me address these points briefly.

First, on the Eurozone.

The problems of the Eurozone are driving heated discussions between its members and leading to potentially significant changes inside the European Union.

There are calls from some for greater solidarity and burden sharing.

And from others insistence on tough rules for fiscal discipline.

These arguments raise far reaching questions of national sovereignty, and it is yet to be determined how far or fast the changes will go but it seems likely that we will see a process of some further integration for members of the Eurozone.

Mr Speaker, Britain will not join the single currency - nor will we join the deeper integration now being contemplated.

But these changes driven by the Eurozone will alter the European Union for all of us.

So they need to be done in the right way.

That should mean flexibility over how Europe develops to accommodate the interests of all Member states both those inside the Euro, those who might one day join, and those - like Britain - who are outside and have no intention of joining.

It also means that as Eurozone members make the changes they need so we in the UK will have the ability to argue for the changes that we need in our relationship with a changing European Union, to get the best possible deal for the British people.

Mr Speaker, the banking union - elements of which were agreed last week - is a good example of this.

A single currency needs a single system for supervising banks so Britain supported the first steps that were agreed towards a banking union.

But in return, we - and others - demanded proper safeguards for countries that stay outside the new arrangements.

So the Council agreed a new voting system which means the Eurozone can not impose rules on the countries outside the Euro area - like Britain - without our agreement.

There is also an explicit clause which says that no action by the European Central Bank should directly or indirectly discriminate against those countries outside a banking union.

This is vital for our financial services industry which must continue to be able to provide financial products in any currency.

And the Bank of England and ECB will have a statutory memorandum of understanding which will ensure they work cooperatively and openly to supervise cross-border banks.

These safeguards set an important new precedent in terms of giving rights to countries that choose to stay outside the Euro.

In winning this argument we have demonstrated how a change necessary for the Eurozone can lead to a change for countries outside the Eurozone -which can help us to safeguard the things that matter to us in Britain, in particular the integrity of the single market.

And as the Eurozone makes further changes, I will seek every opportunity to get the best deal for Britain and for the Single Market as a whole.

On growth and competitiveness, this year we have already secured:

  • a proper plan with dates and actions for completing the single market in services, energy and digital
  • a commitment to exempt small businesses from new regulation
  • the establishment of a European Patent Court, with key offices in London, which will save businesses millions of pounds
  • a new free trade agreement with Singapore.
  • and the launch of negotiations on a free trade agreement with Japan that could increase EU GDP by 43 billion euros a year.

The conclusions from this Council have the additional benefit of referring to Commission plans to - and I quote - “scrap [some of their own] regulations that are no longer of use.”

Mr Speaker, on defence, we are clear that NATO is the cornerstone of our defence and EU co-operation should avoid costly new bureaucracy and institution building.

We will never support a European army.

The focus of the Council conclusions is entirely consistent with this - referring to practical co-operation to tackle conflict and instability in places like Kosovo and the Horn of Africa.

In addition, the conclusions welcome proposals to open up closed defence markets in Europe, which will be to Britain’s benefit.

Finally, Syria.

As a result of Assad’s brutality, a humanitarian crisis is unfolding in Syria on our watch with over 40,000 dead and millions in need of urgent assistance as a hard winter approaches.

There is a moral imperative to act. And Britain is doing so, as the second largest donor in terms of humanitarian aid.

But there is also a strategic imperative.

Syria is attracting and empowering a new cohort of Al Qaeda-linked extremists.

There is a growing risk of instability spreading to Syria’s neighbours and a risk of drawing regional powers into direct conflict.

So we cannot go on as we are.

Mr Speaker, the Council was clear - as Britain has been for many months - that Assad’s regime is illegitimate.

It committed to work for a future for Syria that is democratic and inclusive, with full support for human rights and minorities.

We will continue to encourage political transition from the top and to support the opposition which is attempting to force a transition from below.

This will include looking at the arms embargo.

And the conclusions make clear that we must now explore - all options - to help the opposition and to enable greater support for the protection of civilians.

So Mr Speaker, progress on Syria our objective on banking union secured and the principle established that changes in the Eurozone require safeguards for those outside.

And I commend this Statement to the House.

Help us improve GOV.UK

Please don't include any personal or financial information, for example your National Insurance or credit card numbers.