There are welcome signs that the euro area crisis has eased. The eurozone has exited recession, and there are positive indications of progress in countries such as Ireland, Portugal and Spain. But the House of Lords EU Economic and Financial Affairs Committee, in this update report on the euro area crisis, says that the eurozone remains weak and vulnerable. Despite some countries showing signs of recovery, the report finds that fundamental weaknesses still exist, such as poor growth, huge differences in prosperity between Member States, destructively high levels of unemployment, and growing fears of a deflationary spiral. These weaknesses leave the eurozone extremely vulnerable to future shocks. The Committee also repeats its warning to the Government that the UK is becoming increasingly isolated, as the euro area knits closer together. In order to ensure the UK’s interests are effectively promoted, the Government and the Bank of England should maintain and develop constructive relationships with the increasingly powerful euro area institutions. All parties should also redouble their efforts to convince euro area colleagues of the benefits of the City of London as the leading global financial centre for the EU as a whole.