MPs call for eurozone collapse plan

First published in Business Daily

© Press Association 2011

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

The joint committee on the Government's National Security Strategy (NSS) described the full or partial collapse of the single currency area as a "plausible scenario".

The consequences, it said, could include the outbreak of "domestic social or political unrest" and a surge of economic migrants within the European Union.

Further international economic instability could even leave the UK "unable to afford to defend itself", with governments across the EU forced to slash defence spending, it added.

In a wide-ranging report, the committee - whose members include former MI5 director general Baroness Manningham-Buller - said Britain may have to re-think its relationship with the United States, as Washington realigned its strategic priorities.

While the committee welcomed the Government's decision to publish the NSS alongside the 2010 Strategic Defence and Security Review, it said that it had so far failed to produce "a clear over-arching strategy".

It dismissed the assertion in the NSS that the UK did not face any loss of power or influence as global economic activity shifted to Asia and Latin America as "wholly unrealistic".

It said the failure of the National Security Council (NSC), chaired by the Prime Minister, to consider such issues as the potential impact of Scottish independence or a fresh economic crisis showed its oversight of security issues was "not sufficiently broad or strategic".

"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," the committee said.

"We believe that, even in 2010, the potential threat to UK security from a full, or partial, collapse of the eurozone was one of the plausible scenarios which a prudent NSRA (national security risk assessment) should have examined. We call on the NSC to address the potential impacts on the UK and Nato (and how the Government would respond) were this to happen, as a matter of urgency."

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