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Britain ready for collapse of euro

THE UK treasury is making contingency plans for the disintegration of the euro.

However, the UK has outlined that the preparations are being made only for a worst-case scenario and would run alongside similar limited capital controls across Europe.

The plans emerged as Spain's new finance minister Luis de Guindos warned the country's economy was set for negative growth in the last quarter. Mr Guindos said that the next two months "are not going to be easy".

Experts said that Britain's response to the possible break-up of the euro would reflect measures taken by Argentina when it dropped the dollar peg in 2002, according to sources.

Britain's top four banks have approximately £170bn (€203bn) of exposure to the troubled periphery of Greece, Ireland, Italy, Portugal and Spain through loans to companies, households, rival banks and holdings of sovereign debt.

Controls can only be put in place for six months, at which point an application would have to be made to renew them.