Among the targets hit by the ricochet of recriminations that have followed the European Union's failure to agree a new budget, the euro is especially vulnerable. The currency, an artificial construct that has yet to win the affections of many of those who use it, is the creation of a political vision. It was seen as a staging post on the road to the political union, a means — like the dollar in post-independence America — of unifying and integrating bickering states. That vision has now been harshly rebuffed — first by the voters of France and the Netherlands, and then by two days of ill-tempered wrangling in Brussels. As a result, long-suppressed doubts about the currency’s viability and operation have begun to emerge from the heart of the euro zone.

The most vocal have been in Italy, where politicians, especially eccentrics from the Northern League that forms part of Silvio Berlusconi’s coalition, have expressed passionate nostalgia for the lira. While it is tempting to discount their concerns, which reflect Italians’ displeasure with euro-related price increases, there do remain fundamental doubts about the economic viability of the euro. These doubts stretch far beyond the borders of Northern Italy and are based on the inability of central planners to cope with local economic difficulties. For example, there are significant disparities in the Spanish and German inflation rates. While inflationary pressures remain strong in the former, deflation remains a concern for the latter.

The other interesting Italian aspect of currency politics is the possible rise of Romano Prodi, until recently the President of the EU Commission. Brussels is hardly popular in many European capitals, and Italy has been particularly angered by the Commission’s proposal to take action because of the country’s high budget deficit. The temptation for the Italian Prime Minister must be to play to those prejudices at the expense of Signor Prodi. Italy is not about to withdraw any time soon from the single currency. But the political dynamic in that country will inevitably be repeated elsewhere on the Continent as there is an increasing confluence of economic and political concerns. It could quickly find an echo in Portugal, where the budget deficit is even larger, or in Greece, where politicians were recently forced to admit that many of the economic figures that permitted entry to the single currency were falsified.

The value of Britain’s cautious wait-and-see policy has been more than vindicated. So, too, have the prophecies of the currency’s opponents, who said that it would work well for the first two or three years, but that then the political strains of a one-size-fits-all interest rate would show.

Currency controversy is just one more volatile ingredient in the European mix (or mess) that Tony Blair will inherit with the British presidency on July 1. Mr Blair’s priority should be to bring order to the chaos left after last week’s summit meeting in Brussels. The priority must not be propping up a currency but outlining a more sustainable plan for a broader and shallower Europe.

New entrants to the European Union should have the option of joining the currency and be encouraged to offer a competitive economic environment, while exercising fiscal responsibility. With that combination, along with Britain, they should be able to cultivate a thriving economy.