John Baron MP slams folly of European Stability Mechanism

MP accuses EU bureaucrats of prolonging the crisis

A debate was held this week in the House of Commons on a new law agreeing to the creation of the European Stability Mechanism (ESM). The ESM will be a permanent bailout mechanism for the Eurozone, and is meant to play a part in ending the Eurozone crisis. As it is intended for those countries which use the Euro, the ESM will not directly affect Britain. However, because its creation will require an amendment to the EU treaties, Britain’s agreement is required.

John Baron MP and other Parliamentary colleagues – both Labour and Conservative –raised concerns during the debate that the ESM will not solve the fundamental problem of excessive Eurozone debt, and that the Eurozone is not taking the appropriate steps to return to growth by restoring competitiveness. This could include some Eurozone members leaving the currency.

In the House of Commons, John asked,

“Where are the measures to encourage greater competitiveness? Where are the supply-side reforms? They are simply not there. The Minister should consider whether the ESM prolongs the agony and delays the inevitable, and whether our interests are being adversely affected by the position we are taking on this treaty change.”

Afterwards, John said,

“The ESM is not the solution to the Eurozone crisis. Simply pushing the debt around the system between governments and banks will not conceal or erode its scale. Only economic growth will restore the Eurozone economies to health, but there is as yet little sign of initiatives to achieve this.”

“The crisis is being prolonged because of the bureaucrats’ desire to save the Euro, which is seen as essential to the goal of political union. As a result, the social costs for the people are higher. If it wasn’t for political interference, countries such as Greece would leave the Euro in order to spur growth. Britain’s recovery started the day we left the ERM in 1992.”