- House of Lords report says longer-term plans face challenges
- Study comes less than two months before referendum on EU ties
The 19-nation euro area will “muddle through” because of the political will to assure its survival, but ambitious plans for deeper integration are unlikely to be realized within a decade, according to a report by the U.K.’s House of Lords.
The study uses a blueprint drawn up by European Union officials for the future of the euro currency bloc as a starting point to gauge how the U.K. -- which remains outside the monetary union -- could be affected in the years to come. Ideas for a euro-area finance ministry and the bloc’s own budget, which are included in the EU’s road map, are unlikely to come to fruition soon, according to the report published on Thursday.
“We feel that it is vital that the U.K. keeps a watchful eye on how these plans develop, and that the U.K. should do everything in its power to ensure that its position is maintained,” Kishwer Falkner, a Liberal Democrat member of the House of Lords who led the report, said in an e-mailed statement. “While we identify challenges that must be overcome, we believe that there is sufficient political will to ensure that the euro survives.”
The impact that a more tightly integrated euro zone could have on the U.K.’s financial industry has become a factor in next month’s referendum on continued EU membership. Prime Minister David Cameron won assurances from his fellow European leaders in February that the U.K. -- as well as other non-euro countries -- would be able to force a debate about euro-area laws that could affect them.
The EU’s so-called Five Presidents’ Report on completing monetary union, published in June 2015, sets out steps to bind euro-area nations more tightly before 2025. Officials drafted the plans as a way of stabilizing the currency bloc after the Greek debt crisis exposed its fault lines.
The British study finds that longer-term EU plans for a euro-zone treasury and a euro-zone budget “are not only speculative but face significant challenges in coming to fruition,” according to a House of Lords statement.