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Lord Grenfell: My Lords, noble Lords do read newspapers, but not necessarily the same ones as those read by the noble Lord. That may be the difference. I come back to the point. The noble Lord said that Mr. Duisenberg and the bank would be keeping everything to themselves. I am not clear what he means by that. The people running the European Central Bank may not be elected officials, but they have been chosen because they are very good central bankers.

I believe that the result achieved in Brussels--although it was an extremely messy process, which I deplore--is a good one. The noble Lord, Lord Howell, pointed out that now we have the prospect of maybe 12, if not 16, years in which the European Central Bank will be run by two men who are both hard money-men. That is absolutely correct. So although I deplore the manner in which it was achieved, I am quite comforted by the result. If anything, France shot herself in the foot. One thing is certain in that as a result of the events in Brussels, the European Central Bank is going to be even more cautious about political interference than it was before. That is quite right because we need an independent central bank.

As regards Mr. Duisenberg, the 16 years referred to by the noble Earl, Lord Clanwilliam, and the fact that there will be no reports for 16 years, perhaps I may point out to him that that is simply not the case. Mr. Duisenberg said that he did not believe it was a

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good idea to publish reports which tracked the course of discussions and named the names of the people who were parties to them. I believe that he is absolutely right. Serious consequences can flow from a report of that kind being made immediately, or even a short time after, the governing body, which is the board, has met.

The Earl of Clanwilliam: My Lords, will the noble Lord reflect on the arrangements made by his party for the management of the Bank of England? It reports immediately each month.

Lord Grenfell: My Lords, I know that it does, but I am talking about the European Central Bank. There are different considerations here. Let us suppose that there is a recession in France. The vice-president of the European Central Bank, who is a French national, will not find it easy if the course of the arguments that he follows in that body are immediately published. If he makes one recommendation he will be accused of favouring his own country, but if he makes another he will be accused of the opposite. There does not seem to be very much point--and Dr. Tietmeyer agreed--about publishing in detail.

The point I am making is that it is wrong to say that no reports will be coming from the European Central Bank for 16 years. Of course there will be reports. The bank is going to explain why it has arrived at certain decisions without laying out at the time all the arguments in great detail as though it were the transcript of a meeting. Every quarter the president of the European Central Bank will be going before the European Parliament to explain what the bank has been doing and why it has done it. That is the kind of accountability and transparency that we are looking for. It is a great mistake to pretend that if the reports made are not in extenso they are not proper reports. That is wrong.

I come briefly to the question raised by my noble friend Lord Bruce. He mentioned the 20 million unemployed, as though the introduction of a single currency were bound to have a negative effect on that. If one cares to read what Dr. Otmar Issing, currently of the Bundesbank and now of the executive board--and most probably the chief economist of the European Central Bank--has said, he has encapsulated the situation very well in the following words. In Brussels he referred to the fact that price stability was the primary objective of the Central Bank, while taking into account what it was that the member governments saw as being the essential economic policies that they wanted pursued in Europe. He said:

    "Price stability, and the resulting low interest rates, will be instrumental in securing higher levels of investment, increased growth and new jobs".

It is not the responsibility of the European Central Bank directly to be creating jobs. But by pursuing price stability and being very firm on that, in the end, as Otmar Issing said, that should lead eventually to an increase in jobs.

The final point I wish to make is this. I hear voices in your Lordships' House suggesting that if there is no precedent for something, then it is too risky to take on.

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I do not remember the Wright brothers having any real precedent for getting an aeroplane off the ground when they went about their particular enterprise. But I find it distressing that we live in a time when people believe that where there are no precedents no risks should be taken.

Of course EMU is a gamble, but it can be made to work provided that there is a good independent central bank and that the governments who are members make their views heard. They will do so through informal discussions in the Euro 11. They will all make their views known through ECOFIN which will have primacy over Euro 11. They will also be heard in the governing council and general council of the European Central Bank.

It is not as if EMU has been introduced with no clear ideas as to whether or not there are structures in place to make it work. The structures are in place. If they are used properly, there is a very good chance that EMU will prove to be the success that many believe it will be and that it will become a major reserve currency in the world and serve the single market in the way intended.

It would be a pity to take the view that just because we are uncertain that it will work, we should shy away from it. If that had been the policy all the way through, the European Union would never have got off the ground in the first place. I know that that would have given great pleasure to a number of noble Lords, but the truth of the matter is that we should give this a try. There are so many signals to suggest that it is a good move to make. We should have the courage to set aside some of our fears about what may happen if it goes wrong and make a determined effort to ensure that it goes right.

Baroness Oppenheim-Barnes: My Lords, before the noble Lord sits down, perhaps he will clarify the point that he has just made. If as he says we should give it a try and it does not work, is he saying that the consequences will be so insignificant that we should just get out of it and give something else a try?

Lord Grenfell: My Lords, I withdraw the words "give it a try". I meant that we had to try very hard to make it work. We are not certain that it will work, but we have to try.

Lord Belhaven and Stenton: My Lords, before the noble Lord sits down, I should like to return to some recent remarks. I believe that my noble friend Lord Beloff meant that not many noble Lords read French newspapers. It is not a matter of what newspapers noble Lords read. If any noble Lords read French newspapers they may come to the conclusion that France is in turmoil, with strikes and every kind of disorder.

Lord Grenfell: My Lords, perhaps I may inform the noble Lord who has just sat down that I left my home in the centre of Paris this morning and that neither when I read my newspaper which I picked up along the way, nor when I travelled to the Gare du Nord did I become aware that France was in turmoil. I assure the noble Lord that I read the French newspapers every day and I

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have seen no recent signs of that. I believe that the last manifestation that I saw occurred some distance away and that on that occasion some shopkeepers were complaining about working hours.

Lord Hughes: My Lords, apart from anything that my noble friend the Minister may say about the desirability of inserting an amendment of this kind into the Bill, it is obvious to me that if the point arrives when the Government of the day know exactly where they stand in relation to the currency, they must make a report of some kind to Parliament. I would be surprised if it did not include the three points contained in the amendment of the noble Lord, Lord Mackay.

I do not support this amendment in its present form because I believe that it would be unworkable. I can envisage two sets of circumstances. Before 1st May 2003 there may well be a situation in which the Government of the day are in possession of all the facts to enable them to make a decision on which they wish to report to Parliament. If before 1st May a Minister rose to say that he wished to make a report to Parliament on the position and asked to be absolved from the necessity to make it a year or 18 months hence as provided for in the 1998 Act, I do not suppose that there would be any difficulty in obtaining consent to that.

But there is another possibility. It may be that some time at the beginning of 2003 the Minister responsible may know that he will not be in a position to make a statement on 1st May 2003. If the noble Lord, Lord Mackay, is right, according to the answer provided to me the Minister would have to ask Parliament to pass another Act enabling the Minister to say that he would not be in a position to make the statement on 1st May 2003 and asking Parliament to remove that provision from the legislation. That would be absolute nonsense.

It is obvious that whatever the merits of this amendment it is defective in that it refers to a specific date. If it had said "at the earliest possible moment" or words to that effect, it would have been appropriate to whenever it was suitable to make the statement, but including the date 1st May 2003 makes the amendment unworkable. Quite apart from the merit of inserting this into the Bill at all, I believe that if we are to have such an amendment, it should be one that works.

6.15 p.m.

Lord Pearson of Rannoch: My Lords, I was not going to intervene in this debate but I feel that I must do so very briefly given the unbounded optimism and enthusiasm of the noble Lord, Lord Grenfell, for this project. There was discussion earlier in the debate about the timescale which is in the amendment. I am sure that the noble Lord and the Minister on the Front Bench will be aware that there is a well informed view in the City of London that it may take as long as two years after 1st January 1999--in other words, up to about 1st January 2001, more or less--for the inherent stresses in the economic and monetary union project to become irresistible. I have referred to those stresses before. Essentially, they are that the single interest rate and the single exchange rate, which the project forces on

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disparate and diverging economies, will not be able to hold their people together for much more than two years. On the one hand, we must be looking at much increased tax from the countries which are doing better and/or civil unrest in the countries which are in decline and which will not be getting the tax from the donor countries.

I do not know whether it is appropriate to put that question to the noble Lord, Lord Grenfell, at Report stage. I am sure that I can look to the noble Lord the Minister to reply in a way that perhaps his noble friend the Lord Privy Seal did not reply in the debate on the EMU Statement the other day; nor did the noble Lord himself reply when I put that question as clearly as I could in the debate on 28th April.

Finally, I cannot sit down without taking issue on two points raised by the noble Baroness, Lady Williams. Referring to sovereignty, she touched on the well-worn analogy to NATO. The slogan runs that we gave up our sovereignty to join NATO, so what do we have to worry about if we give up any sovereignty over the powers to tax and spend which go with EMU?

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