There are few debates in the European Union as dishonest as the debate about enlargement of the eurozone. Three countries were scheduled to join the euro by 2007. ?Regarding Estonia and Lithuania, as the figures stand, things look bad,? Karl-Heinz Grasser, the Austrian finance minister, told the European parliament last week. Only Slovenia is still on target for eurozone membership in 2007.

Mr Grasser was referring to Lithuania?s and Estonia?s inflation rates, which are a little higher than the eurozone average. That is true, but the differential merely reflects a one-off rise in energy prices, and the fact that the general price level is catching up with the rest of the EU. The latter is what economists call the Balassa-Samuelson effect. Strip those effects out, and you come to the conclusion that these inflation rates pose no economic problem at all, neither for them, nor for the rest of the eurozone. But as the rest of the eurozone does not want them to join for other reasons, the inflation criterion comes in handy. In other words, Mr Grasser and his colleagues got them on a technicality.