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Lord Moynihan: I hope that I can do so but I am sure that the Minister will allow me to make one or two comments on her useful reply and on the contributions made by other Members of the Committee.

I asked the noble Baroness two specific questions. I am not as happy as she would like me to be on either of the two answers which she gave. First, my noble friend Lord Onslow raised the definition of "urgency". The Minister answered that to the best of her ability, and I understand that it must be very difficult to give precise hypothetical examples for the future.

However, the thrust behind the question was not so much a request for a detailed list of exceptions on the grounds of urgency but rather to seek an assurance that this Parliament will know the moment the Council has determined that a subject is an exception on the grounds of urgency so that it can be aware that the procedure of the six-week rule, which has been outlined, will be waived. When the noble Baroness takes into account the representations of the noble Lord, Lord Tordoff, I ask her to give due account also to the arguments put forward during this debate and in particular the importance which the Opposition attach to the need for the Council to be required to state formally and immediately when it decides that there will be an exception on grounds of urgency.

Equally, the Minister will no doubt be aware that I am rather disappointed in relation to my hope that the six weeks would start when the documents arrived in Westminster. I appreciate the argument that she put forward so clearly and I recognise that the period was extended from four weeks to six weeks to enable those additional two weeks to be used for the delivery of such documentation. If we knew that that would work, we should be a lot more confident. The critical issue to take into account is not so much the date on which the documents are received by the Council Secretariat but rather the date on which Westminster receives its copy. The Minister recognised that that is an important issue. I understand that some experiments are under way to address that subject.

Once again, I urge the Minister to consider the comments that have been made about the importance of time for due consideration of documents and whether or not we can find a mechanism to ensure that Westminster receives the paperwork well in advance and preferably on a specific date in advance of consideration by the Council.

In conclusion, I thank the Minister and other Members of the Committee for their contributions. I welcome the Government's commitment to the role of national parliaments. There have been occasions during the proceedings when some of us have had cause to doubt the Government's position, not least in our lengthy debates last night in regard to qualified majority voting. As it is so important that national parliaments must remain the primary focus of democratic legitimacy in the European Union, I ask the noble Baroness to

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consider my two questions and the important intervention of my noble friend Lady Park of Monmouth.

Baroness Park of Monmouth: I want to make one additional point about the need for scrutiny as long as possible. In my limited experience in one committee, things usually arrive from the Commission necessarily with no cost benefit analysis or one that is not real or relevant. To achieve one requires consultation and various agencies must be asked to give evidence. That is not easy to do in a hurry. It is difficult to make a serious recommendation to the Government on scrutiny if one is not able to deal with that dimension. I urge that in any representations that are made, that issue is taken into consideration. I thank my noble friend for his kind remarks.

Lord Moynihan: My noble friend reinforces the sentiments of the Committee and adds considerable weight, from her great experience, to the points made to the Government for their consideration. I thank my noble friend and others who have participated in this debate and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

6.45 p.m.

Lord Pearson of Rannoch moved Amendment No. 27:

After Clause 1, insert the following new clause--

Report on economic and monetary union

(". A Minister of the Crown shall lay before both Houses of Parliament a report containing details and an assessment of--
(a) the constitutional impact,
(b) the monetary and financial impact, and
(c) the impact on economic and social progress,
on and in the United Kingdom of any measure adopted, or decision taken, by the Union pursuant to the objective set out in Article B of the Treaty on European Union of establishing economic and monetary union ultimately including a single currency.").

The noble Lord said: This has been billed as a tidying-up debate on European economic and monetary union after our lengthy debate on 12th March, which we did not conclude then because the noble Lord, Lord Bruce of Donington, was unable to move Amendment No. 27--which remains on the Marshalled List.

I propose to deal with just one of the loose ends left from that debate but an important one. Those of us who believe that European monetary union is a most unfortunate project sometimes point out that among its many weaknesses is that the proposed euro area is not an optimum currency area. We mean that the separate national economies that are to form the area are not and will not be genuinely convergent, even if there has been a good deal of fudge to meet the Maastricht Treaty's criteria for the countries concerned to qualify for EMU.

When one economy will be in boom, another will be in decline. The most important weapon normally available to an independent economy in those circumstances is to be able to raise or lower interest rates. The foreign

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exchange rate will also fluctuate in line with the judgment of foreign exchange markets. The instrument of taxation is also available to a national government.

Those of us who criticise EMU point out also that a third solution to ease economic shocks in an optimum currency area occurs if its labour is comparatively mobile and can move from depressed areas to prosperous areas and vice versa. Mobility of labour in the United States of America is much greater than in Europe.

Those who support EMU often reply to those fears by pointing out that the USA is not an optimum currency area and nor is the United Kingdom, so what are we fussing about? It may be that there is no single optimum currency area. Certainly the English have only just discovered that they in effect pay a lot of money every year to support public services and so on in Scotland. The northern Italians are steadily growing less happy with the substantial support that they give every year to the Mezzo Giorno.

In our debate on 12th March at col. 347, the distinguished economist, the noble Lord, Lord Peston, took that line rather strongly and emphasised why the USA is not an optimum currency area. He told the Committee that one of the favourite exam questions that he used to set when teaching in that country is whether it would have been advantageous for West Virginia, which at the time had serious economic problems, to have its own currency so that it could devalue. Thus the noble Lord explained why the incredibly successful United States of America, as he called it, is not an optimum currency area.

On 12th March, I failed to put an obvious point to the noble Lord, Lord Peston, but will put it now to the Government. I am sure that we all much regret the absence of the noble Lord, Lord Peston, who would otherwise join in. It may be true that the USA is not an optimum currency area, but it is true that that country's people accept interstate transfers, which can amount to as much as 12 per cent. of a state's gross domestic product. The American Embassy informed me that in 1995, the average per capita contribution from the federal budget throughout the United States was about $863. Moreover, the inhabitants of Virginia--which has presumably recovered economically since the time that the noble Lord taught there--accepted in 1995 that they received only $535 each from the federal budget, in the knowledge that each inhabitant of the State of Columbia received no less than $3,926 or a difference of $3,391 per person.

The inhabitants of Europe are not at all used to paying each other such subsidies--certainly not to nationals in other countries of Europe. The European Union's present budget amounts to little more than 1.67 per cent. of national GDP. European countries do not need to make those transfers because their economies can respond individually to economic shocks through the adjustment of interest rates, tax rates and fluctuations of their separate exchange rates on the foreign exchange markets.

What will happen in the EMU zone when there is only one interest rate and one foreign exchange rate? When the Minister answers, he will no doubt agree that for the foreseeable future labour will be less mobile in Europe than in the United States of America. A clause

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in the Treaty of Rome says that one state should not bail out another, although Mr. Delors did not appear to agree. Indeed, EMU's birth certificate--or the Delors report of 1991--ominously foretold:

    "EMU will necessitate greater fiscal disbursements at EU level."

How do the Government foresee the situation developing under EMU, whether or not we are in it? If there are not to be massive interstate transfers to countries whose economies are in decline from countries that are more happily placed, what will happen to countries in recession? If there are to be such transfers, how will the inhabitants of the donor countries react? That question goes to the heart of the EMU debate and I look forward with interest to the Minister's reply.

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