UK ‘planning for eurozone collapse’

The Government is undertaking “extensive contingency planning” in the event of a eurozone collapse, peers have been told.

Treasury minister Lord Sassoon said the planning was aimed at dealing with “all potential outcomes of the eurozone crisis”.

At question time, he said Britain wanted to see a “strong and dynamic” eurozone and European economy.

But he stressed it was for the eurozone countries to “take the lead in supporting the euro as a currency”.

Lord Sassoon also indicated that Britain would be prepared to stump up more cash to tackle the crisis if the IMF requested it.

“The Government sees the role of the IMF to support individual countries and not to support currencies.

“If the IMF puts forward a case, as it may well do, for an increase in its resources, if there is a strong case the UK will, as it has always done in the past, support the IMF in increasing resources as required,” he said.

Tory former chancellor Lord Lawson of Blaby said: “There is only one thing as worrying as the collapse of the eurozone and that’s the continuation of the eurozone.”

He said it has been shown to be “fundamentally flawed and the cause of all these problems”.

Lord Lawson said ministers needed to look at the risk of a banking meltdown, adding: “If it should prove necessary for the UK Government to rescue any British banks, they should do so on much tougher terms than the ludicrously soft terms which the previous administration used.“

www.thisislondon.co.uk, 18 January 2012