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European Community Heads Of Government

Volume 957: debated on Thursday 9 November 1978

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Q2.

asked the Prime Minister when he intends next to meet the Prime Ministers of other EEC Governments.

I shall be meeting EEC Heads of Government at the European Council in Brussels on 4th and 5th December. I shall also be meeting Signor Andreotti in London on 22nd November and President Giscard d'Estaing in Paris on 24th November.

Apart from telling the Prime Ministers of the other EEC countries by what recondite reasoning putting up interest rates brings inflation down, will my right hon. Friend tell them that the majority on the Labour Benches and the party we represent are opposed to joining a European monetary system that will mean an erosion of our economic sovereignty? Will he ensure that we have a free vote on this matter, and that all relevant documents that will assist us to make the decision are made available in the interests of open government?

I take it that my hon. Friend will want a free vote even if the Government come down against joining.

I think that the subject of erosion of sovereignty is getting a little moth-eaten. The power of Governments to control their rates of exchange has been severely eroded in recent years. I should not have thought we had much control over the rate of sterling in the autumn of 1976, and I have not noticed that the American authorities have had much control over the value of the dollar during recent weeks. I beg my hon. Friend and others who think like him to consider whether a zone of monetary stability, irrespective of the merits of any particular scheme, would not have advantages that are denied when the speculators have a free run.

Regardless of what may be happening over the German pressures for the system of EMS, will the Prime Minister undertake to discuss with his colleagues the whole question of managed exchanges, as it is becoming clearer and clearer that since the breakdown of Bretton Woods the world may be facing monetary chaos by the middle of next year?

I agree with the right hon. Gentleman in every respect. Indeed, it seems to me that when the EMS was conceived the dollar was not in the difficulties that it has recently passed through. I hope that this will give us an opportunity of beginning discussions for a new world monetary system, although I would not want to advance that if my colleagues in Europe thought that it was merely a means of ditching their EMS which we may or may not decide to join.

Will my right hon. Friend also take the opportunity of discussing with his fellow Prime Ministers the fact that it is very inefficient and expensive for the Nine to insist that the European Parliament meets in rotation in different cities? Surely it is time that the Nine Governments reached agreement on one city whether Brussels, Strasbourg or Luxembourg.

That matter has been discussed in the past, but the powers of the European Ministers are limited in deciding the issue.