CONSERVATIVE
New Forest East

PRIME MINISTER – EUROZONE BANKING UNION – 22 October 2012

Dr Julian Lewis: Thank you, Mr Speaker. Can the eurozone have a banking union that works without that leading to economic and political union too?

[The Prime Minister: I think that the short answer to that question is no. Over time, the more there is a banking union and a fiscal union, the tighter the political union will be drawn, because – for instance – German voters having to stand behind Greek deposits, or French voters having to pay for the restructuring of a Spanish bank are deeply political questions. In my view, as the eurozone deepens its commitments, as is inevitable for a working single currency, there will be pressures for further political union, and for further treaties and treaty changes. That is why I believe it is possible for Britain to seek a new settlement and seek fresh consent on that settlement, but we have to show some patience, because right now the issue in Europe is how to firefight the problems of the eurozone – get down interest rates and get the eurozone economy moving – rather than thinking through all of the consequences of banking union and fiscal union in the way that my hon. Friend suggests.]