http://www.bbc.co.uk/news/uk-politics-13839381
20 June 2011 Last updated at 12:11 ET
Greek debt crisis: Straw says eurozone 'will collapse'
Jack Straw: "The euro in its current form is going to collapse"
Jack Straw has predicted the collapse of the eurozone and urged the UK
to consider the "alternatives" as the Greek debt crisis worsens.
The Labour MP and former foreign secretary said the euro was facing a
"slow death" and the 17-member eurozone "cannot last" in its current
form.
He was speaking as MPs discussed the prospect of a fresh bailout for
Greece.
Treasury Minister Mark Hoban said it was in the UK's interest to
"ensure the continuing stability" of the eurozone.
However, he insisted the UK would not be participating directly in any
bailout and UK exposure to the Greek economy was "relatively small".
The countries which use the single currency have said Greece must
agree further austerity measures before receiving £10bn, raising the
prospect of the country defaulting on its debts should it be unable to
do this.
'Going to collapse'
London Mayor Boris Johnson is among a growing number of UK politicians
to call for this to be allowed to happen - and for Greece to leave the
eurozone.
“And since the euro, in its current form, is going to collapse is it
better not that this happens quickly rather than a slow death” - Jack
Straw Former Foreign Secretary
Mr Johnson told The Daily Telegraph: "The euro has exacerbated the
financial crisis by encouraging some countries to behave as recklessly
as the banks themselves.
"We are supposedly engaging in this bail-out system to protect the
banks, including our own. But as long as there is the fear of default,
as long as the uncertainty continues, confidence will not return
across Europe."
Asked in the Commons to respond to a urgent question about the UK
government's position in the event of a default, ministers faced a
succession of calls from Tory and Labour MPs for Greece to exit the
euro.
Jack Straw suggested the eurozone was facing a potentially terminal
crisis.
"What the government should do instead of sheltering behind the
complacent language, weasel words that 'it is not appropriate, we
should not speculate' is recognise that this eurozone cannot last," he
said.
"And it is the responsibility of the British government to be open
with the British people now about the alternative prospects.
"And since the euro, in its current form, is going to collapse is it
not better that this happens quickly rather than a slow death."
Mr Straw, who was home secretary before becoming foreign secretary
between 2001 and 2006, was always seen as one of the more eurosceptic
members of Tony Blair's cabinet but has become increasingly outspoken
on the issue such returning to the back benches after last year's
general election.
In the Commons, Conservative MP Anne Main said Greece should be "put
out of its misery" and allowed to "depart peacefully" from the
eurozone while fellow Tory Bernard Jenkin called for an "orderly
departure".
Treasury minister Mark Hoban responded that Greece needed to get its
economy "back on track" and that its inability to raise funding from
financial markets meant that a further bailout might be required.
'Distress and misery'
However, he stressed that the UK would not be participating "directly"
in any rescue - although it could be liable for any further support
via the International Monetary Fund.
"The UK only participated in the May 2010 package for Greece through
its membership of the IMF.
"So the burden of providing finance to Greece is shared by the IMF and
Euro-area member states and we fully expect this to continue. Our
position on this is well understood across the euro area."
Asked about the wider impact of Greece defaulting on its debts, he
said the Treasury, Bank of England and Financial Services Authority
was closely monitoring the financial system but that UK banks had an
exposure of just $4bn to Greece - much smaller than either France or
Germany.
He said that the UK had a "big interest in ensuring the continuing
stability of the eurozone."
But he added: "Clearly this crisis demonstrates the huge strain the
eurozone is under - that is why it was right for us to stay out of the
eurozone."
The Greek government wants a similar rescue deal to the $110bn bailout
it received last year but eurozone financial ministers have postponed
the latest £10bn loan from the EU and IMF until further austerity
measures are introduced and are awaiting the outcome of a vote by the
Greek Parliament on Tuesday.
But former Labour Europe Minister Denis MacShane insisted it was in
Britain's self-interest to help prevent it defaulting on its debts and
leaving the single currency.
Although he conceded that Greece should "probably not" have joined the
euro in the first place, he said the consequences of it leaving now
would be severe.
"For a nation to go bankrupt would condemn its people to a long period
of distress and misery, which would only create further immigration
flows as Greek workers are forced to get on their bikes and seek
employment elsewhere," he told BBC News._______________________________________________
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