A member of the House of Lords has been criticised for comparing German economic policy to the Holocaust.

Speaking during a parliamentary debate on the European Union on Thursday afternoon, Ukip peer Lord Willoughby de Broke said the poorer southern states had been failed by the single currency and the "political adventure of the EU".

"Europe has turned into a weapon of mass economic destruction," he said.

"What is the remedy prescribed by the EU leeches? he said. "It is to take more blood in the form of more wage cuts, more unemployment, lower pensions. 'Austerity macht frei' seems to be the remedy prescribed by the Germans, certainly to Greece and to the rest of the "Club Med" members of the eurozone when they are unable to meet the German requisites."

The Nazi concentration camp of Auschwitz displayed the phrase "arbeit macht frei", meaning "work sets you free", on its gates.

The sign can still be seen at the site of the camp as a reminder of the estimated one million people who died there.

Lord Willoughby's comments were attacked by Lib Dem peer Lord Teverson.

"Can I just say that I find that remark offensive because it likens German economic policy, however wrong we may agree it is, to a camp that practised genocide? I think that that is utterly inappropriate," he said.

However the Ukip peer refused to back down, telling peers that he thought the Nazi comparison was appropriate.

"The fact is that the German Finance Minister, Herr Schaeuble, is recommending more and more pain to be inflicted on Greece regardless of the fact that it is going to do the Greek population and Greece's economy no good at all. That is what austerity is leading to," he said.

"That is why I used that expression. He is saying that more austerity will bring you free-austerity macht frei. I repeat that."