For most of the 1990s, the euro was the big political question for both Spain and the UK. In Britain, the question was whether to join, while in Spain the concern was whether its economy was robust enough to qualify for membership.

As the credit crisis begins to bite with particular severity in the UK and Spain, opinions about the pros and cons of the single currency on its 10th birthday are again fluid.

With Britain at risk of an old-fashioned sterling crisis in which currency flexibility suddenly does not appear so attractive, the euro seems more attractive to the UK. But as Spain suffers from high costs and the inability to devalue against Germany, membership could become less agreeable.

On being accepted into the euro club in the 1990s, Spain immediately benefited from lower costs of servicing government debt, and its governments have been prudent in running surpluses that have turned to deficit spending only in the past few months in the face of the global crisis.

The single currency is about much more than economic statistics. Spaniards are not only much wealthier in absolute terms than they were a decade ago, they are also more confident about their place in European politics and commerce.

Not all of Spanish society was so thrifty, however, with the private sector (both households and companies) taking full advantage of the combination of low interest rates and a solid currency to spend beyond its means.

The uncomfortable truth is that Spain owes much of its high economic growth of the past few years to an unsustainable burst of spending on housing and imported consumer goods, financed by borrowing pushing the current account deficit to 10 per cent of GDP.

Those were the good times. But now that the housing market has collapsed and credit flows have dried up, Spain must adapt fast. In the old days, that would have meant devaluing the peseta to keep exports competitive; today, inside the eurozone, the only remedies are to be found in the real economy through greater efficiency and reduced demand – in short, unemployment and recession, something Dominic Bryant, an economist at BNP Paribas, calls “the painful adjustment”.

Britain’s recent economic history – single currency apart – has been remarkably similar. It had its own revolution in economic policy in 1997 when the Bank of England was given operational independence to set interest rates for the first time since its foundation in 1694.

Bank independence created the impression within Britain and abroad that the country had cracked its troubled history with inflation, pushing down government bond yields and attracting foreign capital flows.

Everyone was aware that the housing market was inflating faster than expected, but the rises in prices, in household debt and in the foreign funding of banks were argued away as a corollary of the UK economy’s strong performance.

Gordon Brown, the prime minister, was so confident in 2007 he had transformed the outlook that in his Budget speech he boasted: “We will never return to the old boom and bust.” But confidence has evaporated with the government conceding that Britain is due for a recession.

Treasury and Bank officials insist that things would be worse if Britain were constrained by euro membership and unable to allow the pound to depreciate. But there lurks a deep-rooted British fear that the currency’s more than 20 per cent decline is the start of a wider loss of confidence in the British economy that could lead to higher yields on government debt and capital flight from the country.

The euro, whether in or out, has had less effect on each economy than is often supposed. Linking to a bigger economic zone did not protect Spain from a housing and credit bubble and nor did currency flexibility in Britain.

By this year, both countries were running large current account deficits and had amassed record levels of private sector debt.

And what about prosperity? Spain’s gross domestic product per head in 1995 was $12,855, or 73.2 per cent of the UK level at purchasing power parity exchange rates, according to the Conference Board, the international business organisation. By 2007, Spain’s GDP per head relative to the UK was barely changed at 73.8 per cent of the UK’s $23,669.

Read earlier articles and view an interactive feature to mark the euro’s 10th birthday at www.ft.com/euro10