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Lord Richard: My Lords, the noble Lord expresses himself in his customary rather florid way. If he is asking me a serious question, I shall try to answer it seriously. But there is no question about Mr. Duisenberg wishing to serve the eight years, as I understand it. He would have been appointed for eight years, as indeed he was appointed for eight years. But there is no compulsion on him to retire during that eight year period.

There is one other quotation I would like to give the House. Mr. Wim Kok, the Prime Minister of the Netherlands, a man whom one would have expected to be the most bruised if improper political pressure had been applied, said:

The Prime Minister is pleased that Duisenberg will stay on at least until 2002 when the introduction of the euro notes and coin has taken place. Duisenberg himself will decide the timing of his departure. That is in line with the independent position of the bank president. Mr. Wim Kok said that the Netherlands had won a double victory:

    "We have the right man, in the right place and the European Treaty has been respected."

If that is the view of the Prime Minister of the Netherlands--and Mr. Duisenberg is, after all, Dutch--it should at least encourage a degree of hesitation on the part of some Members of this House on the extent to which the euro was damaged.

Lord Boardman: My Lords, is the noble Lord the Lord Privy Seal--

Lord Barnett: My Lords--

Lord Richard: My Lords, I find it very difficult to referee. However, I think that it is the Government's side first, followed by the Cross-Benches, then perhaps the Opposition and then the noble Lord, Lord Boardman.

Noble Lords: Lord Boardman!

Noble Lords: The Opposition!

Lord Boardman: My Lords, is the noble Lord the Lord Privy Seal aware that on 27th February this year

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Sub-Committee A of the Select Committee took evidence from Mr. Duisenberg in Frankfurt and that that evidence, although recorded, has not yet been published? In that evidence, Mr. Duisenberg was asked specifically about the eight-year term of the proposed presidency. His answer was very clear and in complete contrast to the answer reported in the Statement repeated by the noble Lord the Lord Privy Seal. It is inconceivable that that Statement could have come wholeheartedly from the man who gave evidence to the Select Committee of this House earlier this year. It casts considerable doubt on the credibility of EMU.

Lord Richard: My Lords, with great respect to the noble Lord, what it casts doubt upon is the credibility of the statement of Mr. Duisenberg that I put to the House. I can actually give your Lordships chapter and verse for it. Indeed, it came from an interview to a Dutch magazine called Opzij--and I hope that I have not done too much harm to it by my pronunciation. The interview appeared in an issue dated November 1996 and the following is a direct quote from the article written by Mr. Duisenberg:

    "I do promise, however, that I will not stop after three months nor after two years, but my guarantee does not go beyond that ... I will not give anybody the guarantee that I will stay on for that full period".

I can only go by the evidence in front of me, in just the same way as the noble Lord can only speak according to the evidence available to him. I should say that Mr. Duisenberg repeated that when he came into the Council during the course of deliberations on Saturday. Indeed, I have already told the House what he said on that occasion.

Lord Barnett: My Lords, I should tell my noble friend that I very much regret the events which took place over the weekend. Perhaps my noble friend can explain to me why some governments never seem to be willing to say that a compromise has been reached, especially in the case of Europe. As far as concerns the noble Viscount, I am not clear as to whether he was arguing in favour of qualified majority voting on a greater scale. I see that the noble Viscount indicates that he was not. Therefore, he would either have done a compromise deal or would have done no deal at all. I see that the noble Viscount is nodding his head in agreement. However, I believe that that would have been a disaster.

The real problem is not that what was done will destroy the economic independence of the European central bank; indeed, that is not at issue. What has always been a problem with this whole issue is the independence of the European central bank, balanced by some form of accountability. That is the real issue: whether there will be any accountability. As regards Duisenberg and Trichet, I do not wish to divulge the unpublished minutes of my committee. I have the honour to chair that committee and the noble Lord, Lord Boardman, is a very distinguished member of it. He disagrees with me fundamentally on most issues, but the plain fact is--and I am sure that the noble Lord will not disagree with me on this--that Duisenberg and

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Trichet are both very impressive central bankers. When you have central bankers of that kind then, whatever is done in appointing them, there will be independence in the European central bank. Indeed, we should make no mistake about that fact. The power given to those two by the treaty will be used to the fullest extent.

However, the truth is that an independent central European bank--and I put this to my noble friend--is the last thing that its critics want. They will not admit it, but that is so. They include the noble Viscount, his right honourable friend in the other place and, if he was speaking for them, his honourable and right honourable friends. I cannot say whether he was speaking for all of them; indeed, I doubt whether he can. Nevertheless, they really want the European central bank to fail. That is what it is all about. They will not admit it, any more than my noble friend will admit that a compromise deal was done over the weekend, as often happens in the European Union. Why do we not admit it? Why do we not say so? It is better than doing nothing and it happened. If they wanted a qualified majority voting system they could have had it, but they do not. They have objected to some of the QMV that has gone on so far. Therefore, perhaps my noble friend can tell us whether or not it is a fact that the Opposition and the critics want the ECB to fail.

Lord Richard: My Lords, I have no doubt about that at all. I am intrigued by the sudden zeal for the purity of the treaties which is now coming from the very people who protested most, strongest, longest and loudest about their imposition. My noble friend is quite right.

Lord Blaker: My Lords, the noble Lord deserves the congratulations of the whole House on the remarkable feat of having repeated the Statement and given his answers with a straight face. Is not the most regrettable aspect of the proceedings in Brussels the fact that one important nation pursued its own national interest as it thought--and it may have been wrong--to the detriment of the interests of the Community as a whole? Does that encourage the Government if they still intend to join the single currency in due course?

Lord Richard: My Lords, I do not share that view and my face is perfectly straight. The reason that my face is straight is that, when the Government arrived in Brussels on Friday and Saturday, they were faced with a real difficulty; namely, that Mr. Duisenberg was letting it be known--and indeed, had let it be known--that he was not going to serve for the full eight years. I trust that noble Lords will accept that for the sake of argument. They may not agree with it, but I ask them to accept it at this stage.

If that was the position--and, so far as I can tell, it clearly was the position in the minds of almost everyone who was present in Brussels--clearly some way out of it had to be found. Indeed, two or three ways could have been found; for example, the treaty could have been torn up and people could have said, "Right, Duisenberg will have four years and Trichet will take over from him at the end of that time". However, that would have been

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in contravention of the treaty and my right honourable friend the Prime Minister was well aware of that fact. Therefore, he negotiated to try to preserve the obligation in the treaty that the appointment had to be for eight years. How could one do that? The only way in which it could be done was to create a situation whereby Duisenberg would be appointed for eight years, while recognising that at some stage during that period he will go. The precise timing of his departure is very much a matter for Mr. Duisenberg.

My right honourable friend the Prime Minister was asked at a press conference immediately after the Council meeting: "What if he changes his mind?". That is an interesting thought. If Mr. Duisenberg were to change his mind, that is a matter for him as my right honourable friend said. If he were to change his mind, who knows when M. Trichet would become the governor of the European Central Bank?

However, the fact of the matter is that the terms of the treaty were preserved and Mr. Duisenberg's position was protected to his satisfaction. Every other country that was present seemed to be reasonably satisfied with the outcome. The Dutch have expressed their satisfaction with the end result. The result of the weekend is that the euro is launched with a membership of 11 countries. Some people, like the noble Lord, Lord Rodgers, think it is a great shame that we are not the 12th country. That is a view which I know is held strongly in some quarters. As I said, the euro is now launched. All the dismal Johnnies who said that it would not happen or that it would not work or that the markets would not react to it are wrong.

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