Chris

It aint rocket science - the Euro exists because it suits the grand political aspirations of those who believe in 'The Project'. It is economically indefensible, and those who purport to make economic defences of it merely do so either to hide the true political motives of it, or have been hoodwinked by others who do so.

Gordon Brown, love him or loathe him, is just about the most respected finance minister in the world, and he has repeatedly, and carefully, insisted that Britain would only join the Euro if it was demonstrably in our interest to do so. It is clear that he is sceptical that it will ever be in our interest.

The Bank of England, in setting an interest rate of 4.5% while the Eurozone rate is just 2%, demonstrates by its actions that the Euro would be bad for Britain. Macro-economic policy isn't like dusting crops, boy: a base rate of 2% would fuel rampant house price inflation, prompt massive levels of consumer debt in the UK and eventually stoking up inflation ... and that would end our economic stability real quick wouldn't it.

Conversely Germany, languishing in recession, finds 2% to be too high to stimulate recovery. Economists there say the country needs a 0% rate. There is no way Germany will get this, of course - 2% is the best compromise the ECB can come up with, seeing as it has the impossible task of setting a single rate for the dozen or so Eurozone economies, none of which are as converged as they were meant to be in order to allow the currency to come into existence in the first place, because of course the economic criteria were fudged and sidestepped when they threatened to derail what is, and always has been, a political project.