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When Alice went to Euroland, she fell into a pool of tears. All sorts of creatures were swimming about in it, so, to get them dry, the Acronymic Emu proposed a caucus race. They ran round in circles for half an hour, until the Emu proclaimed: "Everybody has won, and all shall have prizes."

The prize was, of course, the euro — the golden egg of European monetary union that the Emu was about to lay. They were all supposed to have qualified for it. Alice thought that no handicap could bring this ill-assorted field of ducks and drakes together and that the result was a fix. The Emu preferred to call it a vision.

Chronicling this race in the last years of the last century, I picked out the Italian lira as a dubious entry. Its trainers were known to cut corners, and in the trial event before this one — the European Exchange Rate Mechanism, as it was called — the lira had run out and carried the pound sterling with it. The form-book had something to tell us.

I had never wanted to enter the pound in this race, or in the earlier trial. The ERM, I said, could do nothing for us that we could not, if we chose, do for ourselves. It would merely subject us to policies which were designed by others and for others. One size would not fit all, any more than it has with the euro. All the same, our experience of the ERM served one useful purpose: it showed us how much better off we were outside it.

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