Let me start with a disclaimer. I was never a strong advocate of British membership of Europe's economic and monetary union, though I was, and still am, a big fan of Emu itself. I always felt the economic arguments made by euro advocates in the UK were vastly exaggerated and counterproductive. Judged from a narrow economic perspective, which is how the British looked at this, they were right to stay out during the euro's first 10 years. The tangible economic benefits that came with an independent monetary policy outweighed the much less tangible economic benefits of membership.

But that was then and this is now. A financial crisis, a house price crash and a recession later, the arguments are still fundamentally the same, but the cost-benefit analysis produces a different result. The advantage of monetary independence, while somewhat greater than zero, will be more than compensated by the following four factors.