Banks now one of the biggest threats to the European Union, says former chancellor

Hayley Kirton
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The remarks came just one day after German giant Deutsche Bank's shares crashed to their lowest level since the 1980s (Source: Getty)

Europe's banks now pose one of the greatest threats to the future of the European Union, a former chancellor of the exchequer has said today.

Speaking at the Institute of Directors (IoD) Annual Convention, Lord Lamont of Lerwick remarked: "There are many, many crises which are potentially very dangerous for the EU" before adding "the biggest threat to Europe is the banking crisis".

Lord Lamont noted the German and the Italian banking systems were the ones posing the greatest risk to the EU, but added other potential breaking points were the upcoming French and German elections.

The remarks came just one day after shares in Deutsche Bank crashed to their lowest level since the 1980s after reports emerged over the weekend that German Chancellor Angela Merkel was not prepared to offer state assistance to the lender.

Shares in the German giant are down another 3.2 per cent today.

Lord Lamont also said his experience throughout his career had led him to the opinion that Europe was "unreformable" and that, although he would like to maintain a relationship with Europe, he was also a fan of the so-called hard Brexit, in that he wanted a clear break from the Union.

Meanwhile, speaking alongside him, the former Greek finance minister Yanis Varoufakis warned the Brexiteers in the audience that leaving the EU would perhaps not be as straightforward as some might have hoped.

He noted the June decision would lead to years of negotiation.

Read more: Five points the City needs government to heed during Brexit negotiations

During his opening speech at the start of the convention, Simon Walker, the outgoing director general of the IoD, said of the referendum outcome: "We have to work with it and make the best of the opportunities it provides."

To the rescue: Can mega-mergers save Europe's failing banking system?

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