This morning's story that Euro entry might be back on the Government's agenda represents a curious piece of timing.  It follows perhaps the most visible failure of "Europe" in many years.  For Britain at least, the European Union has primarily been seen as an economic project; so when an economic crisis comes along, in which collective action is universally agreed to be the right way forward, even those sceptical about the EU's extended ambitions might welcome effective action.

That hope has been disappointed: the EU is a diminished project as a result of its failure to produce any coordinated response to the the banking crisis and its wider implications.  Rather, national governments have been shooting off in multiple directions with their own schemes.  Sarkozy profers a pan-European bail-out fund; Germany says no; Ireland provides a guarantee for depositors in a few well-connected national banks; Gordon Brown has to beg to get a seat at the table where the decisions will be made.

Even where, as in Ireland, the Commission has been able to rein a government back in to prevent gross distortions of competition within the single market, it has done so too late to prevent the effects of unilateral action when it really mattered.

Some may take pleasure in this marked failure. They are wrong to do so.  The single market project is one which has benefitted Britain immeasurably, and it is less robust as a result of recent events.  In particular, there is a real risk that member state governments may seek to push the boundaries of the flexibility that the Commission has been forced to show in approving state aid to banks.  What odds on some member state governments demanding the same approach in sectors that are affected by the looming pan-continental recession?  Be in no doubt: the firm reassertion of the primacy of member states may be welcome in some areas but poses real risks in others.