Below is the text of Mr Major's response on Monetary Integration made on 5th July 1990 in the House of Commons.
Mr. Spearing To ask the Chancellor of the Exchequer when, and in what year, he placed his proposals for further monetary integration within the European Community before its Council of Ministers.
Mr. Major I have not yet done so, but I expect to discuss it later this month.
Mr. Spearing I thank the Chancellor of the Exchequer for that reply, especially as the question should have been "in what form", not "in what year". Does the Chancellor agree that in an authority that was charged with the responsibility of supervising a common currency, there would be some responsibility for the economy of the area over which that currency was dominant? If that supervising authority is to be accountable, should it be answering questions only to a person or body who must lump it or like it, or should it be accountable to a body that can do something about it? Will the right hon. Gentleman's paper address the distinction between the two types of accountability and which form do the Government prefer?
Mr. Major I certainly concur with the hon. Gentleman's view that the question of precisely what accountability means and to whom will be critical in future debates in the intergovernmental conference and elsewhere on economic and monetary union -
Mr. John Townend Does my right hon. Friend agree that his proposal that the hard ecu should be accompanied by a European monetary fund which could require central banks to repurchase their own currencies with the ecu or equivalent hard currencies would be a powerful sanction against lax monetary policy and, as such, could be the beginning of an embryonic European federal bank?
Mr. Major I agree that the hard ecu would be the most effective counter-
Mr. Bell In relation to monetary integration, does the Chancellor of the Exchequer recall the remark of Sir Alan Walters that by joining the exchange rate mechanism, currency speculators could force a realignment of the pound -
Mr. Major I see no particular reason why I should. My view about the exchange rate mechanism is entirely clear -
Mr. Dykes As the independent central bank has been so spectacularly successful in Germany, and as a similar mechanism is now proposed for the European Community, why are the Government, who are anxious to counter inflation, so timid about the suggestion?
Mr. Major I certainly do not accept that we are timid about countering inflation or that there is a necessary parallel between the activities of the Bundesbank and the German national legislature, and the position of the Bank of England and our legislature. It is my clear view -