This is my column from Monday’s Irish Daily Mail. Scots who are leaning towards independence from the United Kingdom might want to read it, to learn from Ireland’s experience how little influence a small member state has in the EU.

Chigi[i-Chigi]On Friday Enda Kenny went off to see the Italian prime minister at the Palazzo Chigi in Rome. Big deal. I’ve done it, too, walked through that enfilade of doors, under the vast frescoed ceilings, and into the prime minister’s office for 20 or 30 minutes of face time.

Two differences: different years, different Italian prime ministers. Third difference: I had the Italian prime minister to myself (one aide, one translator with us), and the piece I wrote for my newspaper in London was circulated around the world. It was quoted by the Italian national newspaper Corriere della Sera. Mr Kenny also had face time with the Italian prime minister and news of his visit went all over – oh, dear. Just all over the newspapers of Ireland.

When yesterday I asked a Milanese specialist in EU affairs how much coverage the Taoiseach’s visit received in the Italian press, his answer was: ‘I didn’t know he’d been to see Monti.’ Then I sent an email to the EU correspondent of one of the Italian national newspapers, asking the same question. Reply: ‘No news of your p.m.’ I did however manage to find brief mentions of the visit on the Italian wire service ANSA.

The point of that being – well, the point besides the point that maybe the Taoiseach needs tips from me on how to publicise a visit, but I’m not in the public relations business, not yet anyway – that our Taoiseach is internationally insignificant.

Which is obvious to most of us, but Mr Kenny uses the government jet to pose as if he has  influence. He reminds me of a Donald Trump line about the former US Secretary of State, the ineffective Condoleezza Rice: ‘She waves. She gets off a plane. She waves. She sits down with some dictator. They do the camera shot. She waves again. She gets back on the plane. No deal ever happens.’

With Mr Kenny, no influence is ever apparent. It didn’t have to be like this, of course. If this Taoiseach, and the last Taoiseach, had stood up for Ireland in Brussels, the leader of our Government would now be treated with more respect. The EU elite would have realised they were dealing with a mouse willing to roar.

Or as I like to think of it, a rat willing to gnaw. Do you know, for example, just how much respect rats get among West African aviators, given the damage one rodent can do to the wiring of one Boeing? For Boeing, read European Project.

Instead, the insignificant Mr Kenny makes the rounds of the big players in Europe like a fan follows a rock band on tour. He waits at the stage door to snap a picture of himself with them on his iPhone. But no matter how many pictures the fan manages to get -- ‘Look, here’s another one of me with half of Coldplay!’ – Chris Martin isn’t ever going to take notice of him at all.

Example: Mr Kenny had dinner with German Chancellor Angela Merkel on Thursday night, which sounds important, except he had to share the visit with the prime ministers of Latvia and the Czech Republic. I defy more than one in a thousand of you to name either p.m. if you are not Latvian or Czech.

What the Chancellor was doing was dealing with the euro-midgets in one evening. ‘Tick, done, three more off the To Do list. Now, Wolfgang, back to real work. Get me Tim Geithner on the phone.’

Mr Kenny told us he was there to make the case to the Chancellor for the need for a bigger firewall in the eurozone. And did he persuade her? Answer from the Taoiseach: she listened ‘carefully.’ Which sounds like she uttered no word of agreement at all. And since Mrs Merkel has already had several ear-fulls from US Treasury Secretary Geithner, along with plenty of others including the bosses of the IMF and ECB, about a bigger firewall, it is inconceivable anything Mr Kenny would say would carry any weight in the argument.

After Mr Kenny had his snap with Mrs Merkel on the Government iPhone, he flew to Rome to see Mario Monti.

Now, there are two reasons why no Irish politician ought to be spending time with Mr Monti. First, the man was outrageously parachuted into office by the EU elite when they wanted the democratically-elected Silvio Berlusconi out of office. The problem was, Mr Berlusconi would not take orders from them. Unlike Irish prime ministers, Mr Berlusconi did not feel it was his duty to capitulate to demands from Brussels.

I know, Mr Berlusconi was sexually sleazy, but the Italian voters put him in office anyway. His sexual antics were never much of a secret to any voter, and yes, now you ask, I was living in Rome during the last Italian general election.

When the EU wanted Mr Berlusconi out, the EU and the ECB rattled the bond markets enough to make the parliamentarians in Rome panic. With the (truly shocking) connivance of the president of the republic, Giorgio Napolitano, the EU managed to have Mario Monti, who was not even a member of the parliament but conveniently was a two-term former European Commissioner (‘one of us’), and who had not been elected to anything at all, made into a Senator by the president. Then Mr Monti was dropped into the office of prime minister. He formed a cabinet which included not one elected individual.

This was no change of government, this was a Brussels-directed coup. If our Taoiseach respected democracy, he would never shake hands with the unelected Mario Monti.

But there is even more reason than that for an elected Irish leader to avoid the Italian anti-democrat Monti. One of the greatest threats to our economic survival – which is to say, our 12.5 percent corporation tax -- is the plan by the euro-elite to have corporation tax rates ‘harmonised.’ The pressure for this has been building for years. And it was Mario Monti who set off the pressure

It started when José Manuel Barroso, president of the European Commission, asked Mr Monti in October 2009 to write a study of the single market. I covered Mr Monti’s plans in this column soon after: ‘It is no surprise to learn that the study will be nothing but an excuse for the former commissioner to showcase the “big idea” he now shares with the commission president: that the EU must suppress its competitive and liberal policies in order to insure social “redistribution.”’

How to do this? The Economist noted that ‘Mr Monti talks of curbing tax competition between EU countries,’ so that government can pay for social policies even while they try to fix their battered public finances. ‘This could mean agreed minimum tax rates, he suggests, notably on capital and corporate profits.’

But Mr Monti’s passion for harmonising taxes across the EU was evident years before this. In 1998, he called for the harmonisation of tax rates on VAT, energy and excise duties.

At the same time, as Christopher Booker and Richard North note in their book on the history of the EU, ‘The Great Deception,’ Yves-Thibault de Silguy, then the commissioner for monetary union, predicted that tax harmonisation would ultimately lead to EU-wide rates of income tax. Just look at the lurch towards centralised fiscal power the new inter-governmental treaty gives, and you will see that both Mr Monti’s plans for tax harmonisation, and Mr de Silguy’s, are firming up nicely.

The line the Taoiseach’s office put out on Friday was that Mr Kenny and Mr Monti were discussing the firewall and how the EU had to have more policies for growth. Mr Kenny has influence on neither, so you can reckon Mr Monti cared no more for what the Taoiseach had to say than did Chancellor Merkel the day before.

No, I’d say the only thing Mr Monti was interested in during his meeting with Mr Kenny was sizing him up for how much resistance he would offer to Mr Monti’s big idea on tax harmonisation. Answer, obvious to Mr Monti: on the past form of Irish prime ministers, none at all.

Or put it another way. When a groupie turns up at a rock star’s hotel room, what do you thinks the rock star reckons he can do to the groupie?

Note to readers: this is my last post, as I'm now going to be doing more journalism and less blogging.

Thanks to all the thousands of people who have visited this blog since it started in 2008.

Today Olli Rehn, the European Commissioner for Economic and Monetary Affairs, presented an interim forecast to the press here in Brussels.

Headline Rehn's people were pushing: 'euro area in mild recession with signs of stabilisation.' Olli rehn dm[i-Olli rehn dm]Which at this point in the never-ending crisis is about as realistic a picture of reality as 'mild amputation with signs of regrowth.'

If you want the graphs or the powerpoint projections, go look somewhere else. Instead, here are just a couple of things that emerged during the session.

If you look at the figures for all the 27 countries in the EU, you don't see many signs of recession in the countries outside the euro, except for Hungary. Yup, the crisis-disease is carried by the single currency, like black rats carried plague fleas.

Poland is doing especially well. When questioned about this, Rehn couldn't admit the obvious, ie, that it is better to be out of the euro than in. Instead, he attributed Poland's strength to positive spill-over from German economic policies. As if.

Then during the questions there emerged a new phrase about the 17-member single currency: 'the 16 non-German members of the eurozone.'

Great. Europe is being divided into 'Germans' and 'non-Germans.' Last time I came across this kind of thing was in South Africa in the early 1980s when the doors -- and pretty much everything else --were designated for 'whites' and 'non-whites.'

Today we learn from the news that there is continuing 'strong public support' in Germany for the Berlin government's policy of castrating sex criminals. Despite criticism in a report just issued by the Council of Europe's anti-torture committee, Germany is rejecting demands that it should stop the practice.

The Germans say that surgical castration, which is voluntary, leads to low re-offending rates among sex criminals who opt to have the procedure.

And today we also learn that Dominique Strauss-Kahn, France's best known sex-crime       defendant, is now facing charges of 'complicity in pimping' and 'misuse of corporate assets.' He's just been released from custody in the northern French city of Lille following police questioning about an illegal vice ring.

If DSK is convicted on these charges, he could be locked up for a total of 12 years.

Which leaves me wondering if a reduced sentence could be offered in return for agreeing to a voluntary procedure.

DSK cut: really, it'd be for his own good.

This is going to be a Brussels village comment, but still it can illustrate the cultural gap between the British and the Continentals that will never be bridged.

In the Mail today is a report that the Irish butcher Jack O'Shea, who has been running the top-quality butcher's shop in the top-quality food hall of Selfridges department store in London, has been forced out because he was caught selling foie gras at his counter.

Got that? He set up a butcher's shop in a department store catering for the fashionable international people in London and then is sacked for selling foie gras.

As almost any Continental would tell you: in a reasonable world,  he should be sacked for not selling foie gras.

At which point I declare an interest and say that I know Jack O'Shea. Long before he was the Selfridge's butcher in Oxford Street he was the Irish butcher in Brussels.

When I moved to Brussels in 2004, many of the women in the EU Raj -- by which I mean,     O'shea dm pic[i-O'shea dm pic]wives of diplomats, eurocrats, the whole lot of non-Belgians who live in the EU bubble -- recommended to me straight away that I use 'the Irish butcher.' They all went to his shop. (Or, let's be realistic here, sent their cooks to his shop.)

So I got to know Jack -- real name, Cathal, but he decided to trade under the name of his uncle Jack, since he realised his Irish name would be difficult for the Europeans. His family have been rearing and dealing beef in County Tipperary for 200 years.

Not that getting to meet Jack was easy: getting to the top of the queue that would form outside his shop, especially towards the weekend, in a quiet street behind the Commission headquarters could take some time.

Germans would be waiting for his grass-fed organic Irish beef, French customers would be waiting for the blissful pork, and anybody from the British Isles would be waiting for the heavenly smoked bacon. Then there was the selection of British and Irish cheese, and the New World wines, and you can see why there was a queue of the EU entertainment-account upper classes outside the Irish Butcher in Brussels.

I do not know the details of what has happened at Selfridge's. All I know is that if I tell the wife of the retired ambassador one of the most important EU countries what has happened, she will be slack-jawed in disbelief. Her better-than-Ferraro-Rocher embassy parties -- 'You are spoiling us, ambassador' -- depended on meat from Jack O'Shea.

Still, apparently both Harrods and Fortnum & Mason's sell foie gras. Memo to their managment: grab Jack O'Shea and his organic grass-fed beef while you can. Before the food hall at Galleries Lafayette in Paris does.

This is my column from today's Irish Daily Mail --

You know it’s coming. Greece is going to default on its debt and pull out of the single currency. On some Friday at 5 pm -- and it is going to have to be on a Friday evening, so the banks and every account in them can be frozen until Monday morning – the Athens government will announce that they are pulling their country out of the single currency and re-establishing the drachma.

But what happens next, what happens when the Greeks wake up on the Monday to find they no longer have euros but only drachmas?

Listen to the eurozone true believers and you will imagine that all that waits for Greece outside the euro is what used to wait for anyone outside the one, holy, catholic and apostolic church: an eternity at best in limbo, at worst in hell. They forecast a run on the banks, a flight of capital, border controls to stop the terrified people of Greece trying to shift cash out of the country, and a crippling legacy of international business contracts and debts which must be repaid – if ever they can be repaid – in euros. Then eternity in international limbo.

Better listen to someone in less of a euro-religious frenzy. Try Raoul Ruparel, the euro expert at the Open Europe think tank. He says Greece pulling out of the euro would be ‘a messy affair.’ Then he can list a load of mess, but in the end, ‘the new currency would devalue quickly making the economy competitive again and providing the prospect of an export-led economic recovery – an impossible hope within the eurozone.’

That’s more like it. Though I’m not going to say the true believers are entirely wrong. Yes, there will be a run on the banks once the Greeks suspect that the Friday 5 pm announcement is really going to come.

Or rather, a run on what’s left in the banks. People with money in Greece figured out many months ago that their country is bound to drop out of the euro. They have already shifted their multi-millions out of Greek banks. Much of the money went into Switzerland.

Indeed, the flood of Greek euros gushing into Zurich banks is suspected to be one of the reasons the Swiss National Bank last year had to take fierce steps to stop the rocketing value of the Swiss franc.

This is good news. It means that much of the big money of Greece is already abroad and safe from devaluation – and therefore ready to come back into Greece for investment once things under the new drachma calm down

And investment not least in the Greek tourist industry. Because the first result of the Greeks dropping out of the euro and into a new, cheaper drachma is that Greece will offer the cheapest holidays in Europe.

At the moment, any eurozone tourist arriving at the Athens airport is arriving with euros, a.k.a. the German currency, in his pocket. He will have to pay for hotels and meals in German currency.

Imagine instead he could take this German currency to the exchange bureau at Athens airport and buy some new cheap drachmas with it: holiday lotto win.

My advice is that the moment you hear Greece has dropped out of the euro, book your ticket to a Greek island. The Greek tourist industry will boom once the country is out of the euro.

Moreover, to return to that knock the euro true believers are warning Greek banks will take if the country goes back to the drachma, the banks are about to be made more or less bust anyway by the so-called controlled default which the eurozone is still trying to negotiate with investors.

The truth is that Greek banks, what’s left of them, are to be flattened this month or next month when the eurozone bosses finally negotiate a ‘controlled default’ of privately-held Greek sovereign debt.

The reason is that Greek banks hold vast billions of this debt. The eurozone countries are supposed to find another €23bn in these debt negotiations just to recapitalise the Greek banks after the hit of a ‘private sector involvement’ bond swap. Otherwise known as an agreed 70 percent default.

When Greece leaves the euro, or just before, it will whack the remaining 30 percent off its debt. Then it will be starting its new life with its new currency without debt. Already Greece has its finances enough in order that its revenues now pretty nearly cover its outgoings, except for the cost of financing the sovereign debt. Walk away from that debt, and, wee-hee! Free at last.

But how will the country then finance itself? By doing what it should have done in the first place. It can go straight to the International Monetary Fund in Washington and deal with their experts in debt write-offs and devaluation. Getting involved with the other two troika members, the EU and the ECB, as senior to the IMF introduced politics and the goals of the ‘European project’ into Greek’s mess.

Of course, there are practical problems to solve. First, there is the question of printing new currency. Swedish economist Gabriel Stein covered this in a 2009 report for Lombard Street Research: ‘There will probably have to be a period in which euros and the new currency circulate together, but the experience of the switch to euro notes and coins’ – and we all remember that – ‘has shown that this parallel circulation period can be fairly limited – probably no more than a fortnight.’

Euro banknotes have a code which shows which eurozone member has issued them. The code letter for Greece is Y. We can assume that during that change-over weekend a fixed exchange rate will be announced between the euro and the new drachma. So the Greek government can use ‘its’ Y-currency as drachmas until new notes are printed.

Then there is the matter of contracts and other liabilities denominated in euros. As Mr Stein points out: ‘In the run-up to EMU, this was dealt with by legislating that all liabilities denominated in the legacy currencies’ – meaning, for example, the punt – ‘would as of a certain date be deemed to be denominated in euros at a pre-announced exchange rate.’ All that would have to happen is that this process be reversed.

As for bank deposits, the Greek government could pass a law saying that all deposits by Greeks in local banks will be deemed to be in the new currency. Foreigners holding accounts could be given a choice whether to keep their deposits in euros or switch them to the new currency.

As for why foreigner would want to let his account be switched to new drachmas – which of course would be devalued against the euro, that would be the point of dropping out of the single currency – he probably wouldn’t. Which is why most foreigners with Greek bank accounts must have already shifted out their money.

Mr Stein suggests one way to deal with the danger of a run on deposits collapsing the banks: offer depositors an interest rate so high in the short term that it could compensate for the devaluation risk (Mr Ruparel suggests the banks would be nationalised, and he may be right). Or the banks could attract deposits from elsewhere, borrowing on the inter-bank market.

And after that it gets technical, but just remember that devaluation is a decision made throughout financial history by many different countries.

It’s not fatal. It’s just business. The risks can be contained, and are survivable.

But if Greece stays in the euro the pain will be more years long and deep and real economic health cannot return.

For Greece, it is well worth the suffering to be free again, free to rebuild its businesses and employment, free to attract every foreign investor to its newly cheap commercial property and newly low cost labour -- and every one of us to its beaches and tavernas.

Hat-tip to Eurointelligence for spotting what must be the quote of the day: a Reuters account today tells of requests by Angela Merkel for the Chinese Investment Corporation to buy more European bonds.

But Lou Jiwei, the head of the CIC, gave the German Chancellor the same answer other long-term Chinese investors gave her when she visited Beijing earlier this month: No.

Xia Bin, a central bank adviser, then echoed Lou's line on the chances of the Chinese buying any European sovereign debt: 'We may be poor, but we aren't stupid.'

Lsr logo[i-Lsr logo]Following on from my last post, have a look at this just in from damn-near-right-every-time Charles Dumas at Lombard Street Research:

'The correct "haircut" for Greek creditors if the country stays in the euro is 100 percent. Greece's "leaders" know they will be dumped when Greece exits EMU [economic and monetary union]. Thank God for elections!'

'The Greek debt problem is now beyond solution within the euro. If it does not leave the euro, on the optimistic assumption that the euro does not destroy Greek democracy, its debt write-off will eventually be 100 percent anyhow, with continuing subsidies needed.'

Dumas gives lots of punchy analysis, example: 'As recently as December, Greek government Greek riots dm II[i-Greek riots dm II]ministers and various international and European officials were saying the 2011 deficit would be 9 percent of GDP, already an upward revision from the 7.5 percent target that was set as part of the deal under which Greece got foreign financial help. Slippage in the deficit on this scale, expecially from 9 percent to more than 11 percent in little over a month, means none of the estimates produced by the various participants can or should be taken seriously.'

Note, Dumas is talking not only about estimates made by Greek officials, but estimates from the euro-bosses, the people who are trying to force all the countries signing this new intergovernmental treaty to hand over control of their budgets to them. Yes, give your financial future to this same load of proven Continental incompetents...

Then Dumas gets to this: 'Last year's Greek recession and worsening deficit took place in a relatively healthy world and European growth context. This year and next the outlook is much less favourable.'

'Germany's GDP fell in 2011 Q4, and is likely to be down again in 2012 Q1. The rest of Europe is engaged in fierce budgetary deflation and likely to do worse than Germany. Greeece, meanwhile, is embarking on another round of austerity measures, because its official foreign creditors' -- think Germans --'believe it did not carry out its commitments last time.'

'Maybe not -- but the austerity it did adopt was enough to send GDP down more than 5 percent in real terms, and nearly that in nominal terms...the tax base is shrinking too fast, and massive wage cuts will slash demand, income and spending further.'

'The debt may be cut by private-investor "voluntary' write-downs. But after that it will mount again without any prospect of peaking and then falling back...Austerity is making the deficit worse, and the debt ratio to GDP a lot worse, not better.'

Monkey lab wiki[i-Monkey lab wiki]In short, all the suffering through which the Greek people have been put by German demands has been for nothing.

The German-forced austerity has had -- and will have -- no more beneficial outcome for the Greeks than brain electrodes have for monkeys caught in lab experiments.

Here is an edited version of my column in today's Irish Daily Mail --

At this point in the eurozone crisis, the only question to ask is, ‘What are the Germans playing at now?’ The Irish had better figure it out, because after the Germans get finished playing it with desperate, suffering Greece, they are going to be playing it with Portugal and Ireland. And it looks like a nasty little game.

So far the clues point this way: the Germans may want to trigger a disorderly default in Greece so that Greece falls out of the eurozone – and out of the domestic political problems of Angela Merkel.

Apparently the Germans imagine that their banks are now strong enough to withstand a Greek default (I’d say the Greeks have a word for that, and it’s hubris, but German hubris is not the issue today). Therefore, the thinking goes, Merkel can now stop the bail-out loans – which clearly are never going to be repaid -- and thereby force the Greeks out of the single currency. Her taxpayers will then stop complaining that she is pouring their money into a country full of Mediterranean losers.

Here are the facts. At last week’s meeting of the eurogroup in Brussels, the euro finance ministers were scheduled to sign off on the second bailout loan to Athens, worth €130bn. But the eurogroup, controlled by the Germans, announced they would delay any agreement until at least next Wednesday. They said they would stall the pay-out because they want the Greeks to agree to another €325m in cuts.

They also said they would stall the payments because they want the Athens government to have its political party leaders sign promises that, no matter what the voters say in the upcoming elections, they will enforce the austerity policies to which the present government has agreed.

I will come back to the austerity and that demand for voter-proof political promises in a moment. First look at the €325m demand.

Chancellor Merkel has said on several occasions in the past two years that Germany and the eurozone will do ‘whatever it takes’ to keep Greece in the single currency. So you have to ask yourself if €325m is so significant a sum that these euro-bosses would risk Greece going into uncontrolled default next month and crashing out of the euro – Greece has €14.5bn in debt repayments due on March 20 -- rather than just wave the latest bailout loan through? No, it’s not.

In terms of any Western country’s finances, €325m is petty cash. There are private individuals walking around the streets of most capital cities in the world who could write a personal cheque for €325m.

The €325m is not a reason. It’s an excuse.

It’s an excuse to put more pressure on the Greeks by way of more humiliation. In other words, the Germans want to find out how far they can push the Greeks before the Greeks snap and walk out of the euro – leaving Mrs Merkel saying ‘more in sorrow than in anger’ that ‘we did all we could to help, but they decided to leave.’ (Is this German manoeuvre what the shrinks call ‘passive aggression?’ I think so.)

However it is unlikely the Greeks will snap this week. Last night the Greek parliament was due to agree to all the increased austerity as demanded by the eurogroup. As I write this, the vote has not yet taken place, but unless the Greek parliamentary whips are incompetent, the government will get the cuts through.

But will the leaders of the Greek political parties actually humiliate themselves – and their electorate – by signing public promises to stick to the bail-out deal no matter how the vote swings in the upcoming elections?

That would be the real achievement for the Germans, because their aim is to drain democracy out of EU affairs. Why? Because too many electorates refuse to see things the Berlin way.

In short, what the Germans are demanding is the end of politics in Greece. There will be only one policy on offer, whatever combination of political parties forms the next so-called government in Athens: it will be the Berlin policy.

The Irish should not be surprised. Ireland saw the end of politics when the Government capitulated to Brussels and forced the electorate to vote twice on the Lisbon Treaty (also in the way the Fine Gael and Labour blustering on renegotiating our bailout changed right into the Brussels line once the general election was over and they were in Government.)

This is why the new German-directed intergovernmental treaty demands that the laws implementing austerity must be put ‘into national legal systems through binding and permanent provisions.’

The treaty is framed to force all countries ratifying it to invent laws which are beyond the touch of any national parliament ever to be elected. This ‘permanent’ law is to be law beyond the reach of voters. It is to be law the next parliament elected in Ireland, and the one after that, and the one after that, can’t ever touch.

That’s what the Germans intend shall govern all the countries of the EU now: German-designed law beyond the reach of any national ballot box.

And that is why they intend to humiliate the Greek political party leaders this week by forcing them to sign public pledges to ensure just that. And if they don’t – well, it is now easy enough to open the trap door and let the Greeks fall out of the eurozone and perhaps out of the EU altogether.

Still, some people persist in believing the German propaganda that all this – the austerity, the troika demands on Greece, the surrender of national sovereignty to EU institutions – is necessary to ‘save’ Greece, to keep it from declaring bankruptcy and leaving the euro. (I will leave aside for the moment the fact that leaving the euro is exactly what Greece should have done at the start of this series of disasters two and a half years ago.)

But that propaganda is not true, and as evidence I give you remarks by Mohamed El-Erian, chief executive of Pimco, which runs the largest bond fund in the world. Dr El-Erian, former IMF, former advisor to the US Treasury and plenty more, was interviewed on BBC Radio 4 Today programme on Saturday. He described the policy being followed for Greece these last two years by the troika as ‘active inertia. They are active, every three months, yet another set of discussions, more drama, but it’s inertia. They basically have not abandoned an approach that has proved to be totally ineffective.’

‘What is being pursued right now is more of the same, and it will not succeed.'

‘I think that Greece has no long term option but to ask itself how do we restore growth? It leads you to the uncomfortable conclusion that Greece will have to take a sabbatical from the eurozone.’

Or in less diplomatic language, leave the eurozone.

‘It will have to go through a major debt reduction,’ that is, default.

Then it must have ‘a major devaluation to make it more competitive’ which Greece can only do once it is out of the euro and back in the drachma. ‘Then it can regain the path to sustained growth.’

Which is where we come back to the Germans and the game they are playing with Greece. Dr El-Erian said that though Greece leaving the euro is what must be done, ‘No one wants to go down in history for being responsible for this, not Greek politicians, Mrs Merkel doesn’t want it, no one in the EU wants it, no one in the IMF wants it. So because no one wants to go down as responsible for this historic decision, it doesn’t get taken, Greece continues to be stuck in this active inertia, and things get worse.’

In other words, the Germans and EU powers running Greece now know the answer is to get the country out of the eurozone. But for political reasons no one, least of all Mrs Merkel, will say so.

So this dishonest game is being played of putting so much pressure on Greece, of heaping so much humiliation on the politicians and the people, that at some point they will break and say ‘Enough, we are getting out.’

Unfortunately, this dishonest manoeuvre means that the German-led EU is piling tens of billions more in un-repayable debt on Greek shoulders as they wait for the country to reach breaking point.

Exactly the way the German-led EU has piled billions in un-repayable debt on Ireland's shoulders. As I said at the start, this game won’t stop in Athens.

Groundhog Day in Brussels. Here we are again at yet another eurozone finance ministers' meeting.  This one is meant to unlock the second Greek bailout -- €130bn for the moment but watch it climb -- following a deal the Greeks agreed earlier today on ever-more-austerity for their people.

The Greek finance minister is going to present details of the deal to the other finance ministers this evening and then take the loot home. More or less.

Which only means the eurozone politicians will pretend that this time -- really, and we mean it this time -- the Greek government will actually get the Greek civil service and the public service unions to go along with all the cuts.

Oh, sure. The government is going to be able to whack about a quarter off the minimum wage, and there will be no resistance.

Well, not tonight, anyway. As one observer -- an observer well outside the Brussels circle -- explained tonight's deal to me: 'Say yes today, get the cash tomorrow and find an obstacle the next day.'

In short the Greeks have found an elegant Southern European solution to a cash flow problem. All they have to do now is hope the money hits their account in Athens before the members of the German parliament realise they've been had. Again.

Greeks: I do like their style.

Update, midnight Brussels: Jean Claude Juncker, Luxembourg prime minister and head of the eurogroup, has just told us all the eurozone finance ministers will be back here on Wednesday to go on with this decision on Greece. See, as I said, Groundhog Day.

I'll report more on this tomorrow, but for tonight I will just say that between now and Wednesday the euro-elite intend to force the leaders of the Greek political parties to give public promises that they will stick to the agreement.

What is that about, making grown politicians sign pledges? Simple. It's all part of the EU bosses' plan to stop any outbreak of democracy interfering with their power grab in the suffering eurozone periphery. Greece has an election coming up and the EU powers are trying to stop any real resisting political leaders being elected to form a new government.

So this public promise is meant to be a public gelding of the political class. Let's see what happens between now and Wednesday; let's hope at least one Athens leader refuses to have his political manhood removed. 

Nicola Sturgeon, deputy first minister of Scotland, was in Brussels last night recording a video interview with EU Observer and declaring most definitely that an independent Scotland would stay out of the euro: 'Our attitude is to remain in the sterling currency.'

Which only proves that the Scottish government's deputy leader is a lot smarter than the British government's euro-loving deputy prime minister, Nick Clegg.

And I like to think it shows the Scottish Nationalists are paying attention to the advice I gave them in the Scottish Daily Mail last May --

Scottish flag[i-Scottish flag]Should Scotland become independent or not? I’m Irish, so I’m not the one to ask.

But if you want to know should Scotland become independent and join the euro, I am the one to ask -- exactly because I’m Irish. So, here’s the short answer: don’t do it.

Ireland’s independence has been destroyed by the European single currency. The lesson for Scotland from Ireland is that you cannot be both independent and in the euro. It can be one or the other, but not both. You can be a nation, or a province of the European Central Bank. One or the other, but not both.

Ireland’s independence has been destroyed because its politicians – their vanity fed by too many trips to swish meetings in Brussels with their ‘European partners,’ their constituents tempted by unearned money poured in from EU structural funds – let themselves be convinced that sovereignty really could be shared.

It can’t, of course. You can’t share your sovereignty any more than you can share your lungs. Yet in one treaty after another, Irish politicians led their people to hand over their sovereignty in return for everything going from Brussels, especially the euro.

Why especially the euro? Because Irish politicians and too many citizens raised in the pub-ballad version of Irish history thought this would be the final way to show Ireland was no longer some province of Britain, that it really was a nation once again.

More, joining the euro would show Ireland was a ‘European’ nation, as though embracing a currency run for the benefit of Germany and France would turn the Irish into a nation of Continental sophisticates. And the old master Britain would be ‘isolated,’ outside the euro. Perfect.

It was entirely a political decision. There was not one economic argument to be made in     Euro banknotes wiki[i-Euro banknotes wiki]favour of joining the euro. Ireland’s most important trading partners then, and now, were Britain and the United States, and not any of the European states which were to form the single currency.

Surrendering the Irish currency, the punt, to the euro was just nationalist delusion. I hope that if Scotland votes to become independent it will not fall into the same delusion.

It would be foolish to chain the Scottish nation to the euro. That would just be changing the economic and monetary union called the UK for an economic and monetary union called the eurozone.

Because if you can’t control your currency, can’t influence your exchange rate, can’t set your interest rates, can’t control your monetary policy, or your fiscal policy – yes, the eurozone powers are now reaching into control the budgets of every member state – then you are not an independent country.

Right now there are EU officials – known to Irish civil servants as ‘the Germans,’ whatever nationality they are – with offices in what were once Irish government buildings, controlling Irish taxation and spending policy.

If an independent Scotland were to join the euro, ‘the Germans’ would soon set up in Edinburgh.

Yet I suspect the pro-independence movement in Scotland doesn’t realise how far the euro has moved towards fiscal and economic control of its member states. Listening to Scottish nationalists, they seem still back on the 1990s when the line was that joining the euro would just be a small part of economic sovereignty that could be passed over to Frankfurt.

That’s the line the Irish fell for. Will the Scots fall for it, too?

Maybe not, if they realise what happened next to Ireland. During the 1990s, when Ireland still had its own currency and independent economic and fiscal policy, it finally stopped its old high-tax and high-spending ways, and turned itself into a lean, business-oriented economy.

It attracted foreign direct investment. It had a young educated workforce and low labour and infrastructure costs. It had a low corporate tax rate that attracted the top American pharmaceutical and high-tech companies such as Intel to open vast factories in Ireland. Young graduates stopped emigrating to find work in Britain and America.

Ireland did, in fact, what I’d guess Scottish nationalists dream of doing in an independent Scotland. Scotland has lost its heavy industry. However Unionists may mock Ireland now, Ireland’s way out of the grim 1970s and 1980s is the way Scotland must take: high tech, high skill, low cost, low tax foreign direct investment industries.

Then Ireland in all its delusions joined the euro. Its Central Bank turned over control of Ireland’s interest rates to the European Central Bank.

And as this growing Ireland entered the first years of the new century, it found it was caught in a currency union which was setting its interest rates to suit the German economy.

Yet the German economy was flat-lining at just the moment Ireland was beginning to boom: so Berlin demanded and got historically low eurozone interest rates.

The Irish economy started to overheat. An independent central bank in an independent Ireland would have yanked up interest rates to cool things off.

Instead, the ECB kept eurozone interest rates at two percent. German people, caught in a stagnant economy and refusing to spend, put their euros into their bank deposit accounts. The German banks, looking for ways to make big profits, pumped the cash into Ireland’s banks, which were willing to feed the Irish property boom with this tsunami of German savings.

With this flood of euros, Irish labour costs rose. Infrastructure costs rose. Commercial rents rose. Suddenly high tech companies were shutting down: Dell computers moved 2,000 jobs to Poland.

In the old Europe of independent states, this could not have happened. But in a ‘Europe without frontiers,’ tens of billions of euros can slosh from one member state’s banking system to another, and the banking system in a small country such as Ireland – or Scotland – need no longer stay sober and depend on domestic savers for their cash.

Then, the disaster: Lehman’s, the global credit crisis, and Ireland thrown into the worst recession in the entire world. Property prices halved. And the banking system could not repay the billions it had borrowed.

An independent Ireland could have done the right thing, which was, let the banks tell their creditors that they had made bad investments in buying Irish bank bonds, and they were going to have to take a haircut. Or they could swap their lame bonds for shares in the banks: creditors into shareholders.

But the German-controlled ECB wasn’t having that. It blackmailed and arm-twisted the terrified Irish government into agreeing to guarantee all bank debt, even before the government had any idea how big the debt was: the ECB was determined to save German bond holders.

By a calculation from the Irish economist Morgan Kelly, taking over Irish bank debt will now push government debt to a final figure of £219bn. That is equal to debt of £105,000 per Irish worker. You will not be surprised to learn that Irish workers are emigrating again, and at a rate of 1,000 a week.

Now you know what happened in Ireland after it joined the euro. The only question remaining is: what happens next in Scotland – staying in the British union, joining the eurozone union, or becoming independent? Choice of just one, not two out of three.