UK 'must plan for euro collapse'

Ministers should draw up plans to deal with a break-up of the eurozone "as a matter of urgency", a committee of MPs and peers has warned.

The joint committee on the government's National Security Strategy (NSS) said the full or partial collapse of the single currency was "plausible".
It said political unrest and a rise in economic migrant numbers could result.
"Long-term security" is at the heart of foreign policy thinking, the government said in response.

The committee, whose members include ex-MI5 director general Baroness Manningham-Buller, said economic instability could leave the UK "unable to defend itself".

It added that governments across the EU could be forced to cut defence spending if the instability were to continue.

"International economic problems could lead to our allies having to make considerable cuts to their defence spending, and to an increase in economic migrants between EU member states, and to domestic social or political unrest," it said.

And, while the committee welcomed the government's decision to publish the NSS alongside the 2010 Strategic Defence and Security Review, it said that "a clear over-arching strategy" had not yet emerged.
Committee chairman and former Labour foreign secretary Margaret Beckett said: "A good strategy is realistic, is clear on the big questions, and guides choices. This one does not.
"We need a public debate on the sort of country we want the UK to be in future and whether our ambitions are realistic, given how much we are prepared to spend."

 

She told BBC Radio 4's Today programme that while the National Security Strategy was welcomed, the committee could find "no evidence" it had helped shape government decisions in cases such as Libya and Syria.
Mrs Beckett said the strategy had been drawn up "in some haste" after the 2010 general election and the review of due by 2015 needed to be a "much more thoughtful process".
In their wide-ranging report, the committee established to oversee the NSS and the National Security Council chaired by the prime minister, said Britain might also have to re-think its relationship with the US, as Washington realigned its strategic priorities and turned its focus away from Europe.
It said changing US priorities raised "fundamental questions if our pre-eminent defence and security relationship is with an ally who has interests which are increasingly divergent from our own".
The committee said that in an era of "diminished resources", the UK would have to take on a more "partnership-dependent" role in world affairs.
It stated: "We believe it is totally unrealistic not to expect any diminution in the UK's power and influence in the medium and long term."
In response, a government spokesman said ministers remained vigilant and regularly took stock of "the changing global environment" and threats to the UK's security.
"A strategy for Britain's long term security and prosperity is at the heart of the government's approach to foreign policy," he said.