The concept of synchronised economic cycles has returned with a vengeance since Gordon Brown's revealing statement to the Commons a couple of weeks back. In other words, the debate has moved to a consideration of whether strong-growth economies should lock themselves into a monetary union with lowgrowth economies.

Mr Brown argued that it would be unwise for Britain to join a monetary union until its economic cycle comes more into line with the cycles of the other participants. From an economic viewpoint, this makes perfect sense.

If Britain decided to jump on board on January 1st, 1999, it would imply that British interest rates would have to fall towards 4 per cent over the coming year and sterling would have to drop by around 12 per cent over the same period.

Such a prognosis would spell disaster for an economy which is currently enjoying solid growth, or indeed boom conditions when considered in the context of what France and Germany are enjoying.

In fact, the Bank of England is likely to be leaning towards a more restrictive monetary policy over the coming year, rather than a very expansionary one.

Britain has painful memories of how overly accommodative economic policy can send an already strong economy into orbit. A brief conversation with the Japanese at the moment would also be very revealing in that regard.

Despite this very compelling economic logic, I found it difficult to swallow the notion that the British stance is driven by economic considerations.

Politicians around Europe are intent on ignoring economic rationale in the run-up to EMU, on the basis that this project has a lot more to do with a political dream and hence should not be knocked off course by something as trivial as economics.

Indeed, in recent weeks a couple of Irish politicians have said to me that economic excuses can always be found to knock any idea on the head and that there are more important issues to be considered. In other words, ignore cranky economists.

I am quite convinced that if the EMU-friendly British government had the necessary popular support, it would plough ahead regardless of economic cycles and such like. However, that view is purely academic, because the necessary popular support is not there.

Some commentators have argued in recent days that a similar cyclical analysis should be applied to the Irish situation.

The economy is currently in the middle of an unprecedented boom, house prices continue to soar, tax revenues in the 10 months to the end of October were exceptionally buoyant, and it is virtually impossible to hire semi-skilled labour to do absolutely anything. Yet we face the prospect of an early Christmas present from Mr McCreevy on December 3rd.

Against this sort of background, it is probably not over the top to suggest that a decline of at least 1 per cent in interest rates over the next year or so could be deemed inappropriate. But that is exactly what we are going to get.

Continental interest rates cannot rise too far over the next year, with growth still quite subdued and unemployment at uncomfortably high levels.

Mr Otmar Issing, the Bundesbank's chief economist argued during the week that the Bundesbank has a special responsibility over the coming months to deliver an "inflation-free foundation" for EMU.

In other words it should now be pushing rates up to a level which would be consistent with economic activity in the EMU zone in 1999.

With Italy on board, such a rate level can be no less than 4 per cent, while without Italy it can be no greater than 4 per cent.

Recent equity market developments in south east Asia will act as an additional restraint on the upside potential for German rates.

From Ireland's perspective, the only question really is how far rates will fall. Great news for mortgage holders, but perhaps not so good from the point of view of macro-economic stability.

So what can go wrong for Ireland, which will just be akin to an American state after 1999?

Well if we got an outbreak of inflation in the traded sector of the economy, competitiveness would be lost, markets would be lost, jobs would be lost and eventually inflation differentials would disappear.

The problems in the non-traded sector could be more serious, ranging from a more exaggerated house price bubble, general asset price inflation, endemic wage pressures, ultimately resulting in an economy which could become as expensive as Tokyo.

Some marvellous books have been written on economic bubbles and the ferocity with which they can burst, but we only have to look at Japan today to see the results of unsustainable expansion.

The bottom line is that if one believes that the Irish economic cycle is currently well ahead of the European cycle and closer to the British one, then we should act in a prudent manner and delay membership until our economy falls more into line with the economies of our other 10 EMU partners.

However, to suggest such a course of action would be regarded as high-treason, punishable by death.

After all, the political imperative is all important.

Jim Power is Chief Economist at Bank of Ireland Group Treasury. The views expressed here are personal.