IF EVER a political leader needed a lifeline it is Tory William Hague, embarking on the European election campaign with his party still deep in the doldrums and his own personal ratings falling to new lows in the latest opinion poll today.

Then, lo, along comes the Governor of the Bank of England, Eddie George, with an admission that Britain's joining the euro would be an "act of faith" - in other words, a huge gamble that might not pay off.

This is bound to be music the to the ears of Mr Hague and the Tories - a majority of whose supporters, says the same opinion poll, now want Britain not only not in the euro but out of the EU altogether - for theirs is the only major party promising in this campaign to keep the pound, at least during the next Parliament.

But if Mr George's words will be smartly forged into election ammunition by the speech-smiths at Tory Central Office, for the longer term they ought to cause some sober reflection in Downing Street where both the Prime Minister and the Chancellor harbour belief in entry into the euro and whose only reservations seem to be over determining when the time is right - or politically ripe - to put the issue to the British people. In essence, this decision will always be a gamble since monetary forecasting is, for all the expertise employed by government and financial gurus, ultimately no more than educated guesswork that can be swiftly undone by the innate volatility of economics - as anyone who invested in the supposedly-sound currencies of the so-called tiger economies of Asia in recent years knows to their cost. But there are some basic certainties that do accompany this momentous decision over membership. And the most evident is that, unlike the pound whose collateral is this single economy of this country, the euro covers and reflects - thus far - the economies of 11 countries and that their diversity is such that the euro's own stability is bound to be affected. Its fall in value against the dollar by 11 per cent since its launch in January is a sobering reflection of the dispassionate money market's view the undermining influences of the weaker economies in euroland and, perhaps, of whether the convergence conditions among the nations which joined in the first wave were strict enough to ensure that all who went in did so on the strength of having sound economies.

The fact is, there are poorer, weaker economies in euroland and presently the even larger ones of France and Germany are trammelled by high unemployment. On the outside, Britain's appears rich and robust - to the extent it might even have to devalue the pound to match and join the sick euro and the patchwork of diverse economies on which it is based.

If such a situation prevails when the British people are asked to decide, it will be an act of faith to expect them to say a confident yes. A single currency and a single interest rate goes best with a single economy - which contrasts with the stew in euroland.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.