UK 'must remain alert to moves to create eurozone treasury'

Britain must be "ready to act" to protect the national interest in the face of any moves to create a eurozone treasury, peers have warned.

Strengthening of the single currency bloc could lead to the introduction of its own finance minister and the UK must remain "alert" if it stays part of the European Union, according to the House of Lords EU Committee.

It predicts the euro is likely to "muddle through" on the back of the political will for it to succeed.

Longer term plans in Brussels for a eurozone budget and treasury are speculative and face significant challenges but it is vital the UK keeps a "watchful eye" on the developments, peers said.

Completion of economic and monetary union is "unlikely" by 2025, they found.

Baroness Falkner of Margravine, who chairs the committee, said: "While we identify challenges that must be overcome, we believe that there is sufficient political will to ensure that the euro survives.

She added: "While we found that the plans for strengthening eurozone institutions, such as the Eurogroup, are currently very speculative, we feel that it is vital that the UK keeps a watchful eye on how these plans develop, and that the UK should do everything in its power to ensure that its position is maintained.

"The report notes that any major developments would require treaty change and therefore the UK would be well-placed to ensure that its interests are preserved."