The signals from London that Tony Blair's government may favour bringing sterling into monetary union soon after it starts is good news for Ireland. The major risk for Ireland is that if we enter monetary union and sterling stays out, then swings in the British currency could prove very destabilising for the Irish economy. But if the Blair government is intent on taking the pound into monetary union soon after it starts, then the risk to Ireland will be that much less.

The British government certainly seems to be giving more positive signal about monetary union membership, although cynics suggest that getting a desire to see sterling trade lower may also be a factor. But how clearcut a statement of intent on monetary union - which reports say could come as early as next month - might be, is open to question. One thing for certain is that sterling will not be a founder member of monetary union on January 1, 1999.

What may happen is that the British government will announce before the end of this year that sterling would join at a later stage, provided certain conditions are met. The speculation now is that these conditions will be set, so as to allow a referendum in Britain in 1999 clearing the way for Britain to join in the year 2000, or shortly afterwards.

For Ireland, news of a more positive tone in London can only be welcome, despite the Government's insistence that we will join no matter what Britain does.