With permission, Mr Speaker, I would like to make a statement on last week’s European Council.
The main focus of the Council was rightly on Europe’s economy.
In advancing Britain’s national interest I had two objectives.
First to ensure that Britain did not have to contribute to any new Greek bail-out through the European Financial Stability Mechanism.
Second to support efforts to bring stability to the Eurozone and growth to Europe as a whole, while fully protecting Britain’s position.
Let me take each in turn.
First, the situation in Greece.
As I have always said, Britain isn’t in the Euro…
…and while I’m Prime Minister it never will be.
So we should not be involved in the euro area’s internal arrangements.
Only Eurozone countries were involved, alongside the IMF, in the first Greek bailout.
Only Eurozone countries have been involved in discussions about potential further bailouts.
So it is absolutely right not to use the EU wide European Financial Stability Mechanism for future support to Greece.
That’s what I asked for an assurance about at this Council.
And that’s what I got.
Mr Speaker, this was not a simple matter.
Article 122 of the European Treaty is being used to provide aid for Eurozone countries that have mismanaged their economies.
That was not our choice. It was agreed before this government took office.
We have dealt with it for the future because when the new permanent arrangements - replacing the European Financial Stability Mechanism - come in from 2013, we will not be part of them…
…and Article 122 will no longer be used for Eurozone bailouts.
That was the deal I secured last December.
But we still had to deal with the prospect of a bail-out under the existing arrangements.
Under qualified majority voting this required real negotiating effort.
This government has consistently stood up for the interests of British taxpayers.
And, Mr Speaker, as a result, the British taxpayer will avoid a potential liability of billions of pounds.
Stability and growth
My second objective was to support efforts to bring stability to the Eurozone and to promote growth across Europe.
While we are not in the Eurozone, we would be affected - badly affected - by a disorderly outcome to this crisis.
First, banks across the world - including the UK - hold government debt of all Eurozone countries, including Greece.
Second, the effect on other countries far more exposed to these debts would have a knock on effect on us.
As Sir Mervyn King made clear when unveiling last week’s Financial Stability Report…
…the present difficulties in the Eurozone are “the most serious and immediate risk to the UK financial system”
It has always been a long-standing principle that the British government does not comment publicly on market sensitive issues.
And I am not going to depart from that very wise approach.
What is important is that a solution be found quickly, which is credible in the markets, and which will address over time Greece’s fundamental problems and contribute to providing stability in global markets and the world economy.
One element of that solution must, in my view, be using the time we now have to ensure banks and banks’ balance sheets are strong enough to withstand any problems and difficulties. And that there is full transparency across the financial system.
In the UK we are stepping up efforts to ensure our own banking system is resilient to risks originating from the Eurozone.
This needs to be done right across Europe, it needs to be done now, and it needs to be done properly.
I argued for this very strongly at the Council.
And that’s reflected in the language in the Communique.
As a first step that means the current stress tests being conducted in the banking sector, must be conducted properly and transparently, unlike last time…
…and that Europe must implement in full, rather than water down, the new detailed Basel capital and liquidity standards.
Mr Speaker, a key way in which we can help all economies in Europe - including the Eurozone - is to promote sustainable economic growth.
The best stimulus available for European economies is to make sure we are promoting competition, deregulation, supply-side reform, innovation, structural changes and also using the EU to advance the cause of free trade, both via Doha and where appropriate through bi-lateral deals.
Following the proposals that Britain set out at the last council…
…and which many Member States now support…
…I pressed in particular for concrete steps to reduce the burdens on small businesses and microenterprises, vital to promoting innovation, jobs and growth.
The Council agreed that “the regulatory burden on SMEs needs to be further reduced.”
And that the European Commission would now assess the impact of new regulations on micro enterprises and identify existing regulations from which micro businesses should be excluded.
This mirrors what we are already doing in Britain. And it is absolutely the right thing to do.
For too long, Council conclusions have focused only on what Member States should do, rather than on what the European Commission needs to do itself.
Mr Speaker let me briefly turn to other issues raised at the Council.
There were three of significance.
Migration, the Arab Spring and the accession of Croatia.
Britain does not participate in the Schengen Border Area.
And we are not going to weaken our border controls.
As an island, Britain has an important geographical advantage in preventing uncontrolled immigration.
At the same time practical measures to strengthen the external borders of Europe are in Britain’s interests too.
But there was a proposal ahead of the Council to suspend the measures in the Dublin Regulation that allow us to return asylum seekers to the first safe country they arrive in.
Together with Chancellor Merkel, I made sure these proposals were rejected and they are not referred to in any way in the Council conclusions.
We will not have our border controls compromised in this way.
Next, the Arab Spring.
On Libya, the Council agreed a declaration confirming its full support for UN Security Council Resolutions 1970 and 1973…
…and the efforts our brave servicemen and women are undertaking to implement them.
There is now real unity of purpose and political will across the European Union on this issue.
The wider world is turning against Qadhafi too, recognising that the Transitional National Council are the only credible diplomatic body which can represent the people of Libya right now.
The Russians and Chinese have accepted the importance of the Transitional National Council.
And Premier Wen made this point to me in our meeting this morning.
Qadhafi is increasingly isolated.
Indeed today the International Criminal Court has issued a warrant for his arrest.
Qadhafi is now a fugitive from international justice.
The pressure and the time is telling on Qadhafi.
And we will not let up until the job is done.
On Syria, the Council condemned in the strongest possible terms the ongoing repression and the unacceptable and shocking violence of the Syrian regime against its own people.
And at my instigation we expressed particularly grave concern about what Syrian troops are doing close to the Turkish border.
On the Middle East more generally, the Council called on all parties to engage urgently in negotiations…
…and, on the fifth anniversary of his capture, demanded the immediate release of Gilad Shalit.
Finally, Mr Speaker let me turn to Croatia.
Earlier this month I met Prime Minister Kosor and welcomed her country’s progress towards completing European membership negotiations.
At the European Council we agreed that these negotiations would be concluded at the end of this month.
Croatia’s success points the way for the rest of the Western Balkans, whose aspirations to join the European Union we have always strongly supported.
Mr Speaker, at this Council Britain achieved some important objectives.
We have protected the interests of the British taxpayer.
We have secured agreements to promote and safeguard economic growth.
And we have protected Britain’s borders from uncontrolled migration.
And I commend this statement to the House.