Chancellor George Osborne has told the Today programme that a "greater harmonisation of fiscal policies" is needed in the eurozone.

There is a "remorseless logic" for a banking and fiscal union in the eurozone, he said, but there is "no way" Britain would be part of that union.

Britain will require "safeguards" if such a union is created to protect its financial industry, he said.

Speaking to Evan Davis, the Chancellor said he is "optimistic" that a solution is coming for the banking crisis in Spain, but calls for "permanent changes" to stabilise the eurozone in the medium and long term.

When asked about a potential renegotiation of Britain's relations with Europe he said that the referendum lock, triggered if there is a transfer of sovereignty to the EU, is "a very clear safeguard".

On the budget U-turns, George Osborne told the programme that they show the government was not "too embarrassed to put down the shovel and climb out" of a hole.

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