A UK Independence Party peer has been condemned for making an "offensive" remark comparing the German Finance Minister's attitude to the economy with tat of the Nazis at Auschwitz.

Lord Willoughby de Broke made the comment twice during a debate on the European Union on Thursday.

He said: "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."

He also referred to the "EU leeches".

The phrase "Arbeit macht frei" appears on the gates of the concentration camp, which was the site of the murder of more than 1,100,000 Jews and non-Jews during the Holocaust. It is translated to mean work sets you free".

Lord Willoughby's comment was seized on by a Liberal Democrat peer, who said he found it offensive to liken German economic policy "however wrong we may agree it is, to a camp that practised genocide?"

Lord Teverson added: "That that is utterly inappropriate."

Lord Willoughby, a former Conservative Party peer, showed little remorse, and instead repeated his comment. He responded that while he was sorry his remark had been taken that way, he believed that the German economic model was based on the idea "that more austerity will bring you free - austerity macht frei".

"That is why I used that expression," he said.