No more opt-outs as membership of the euro becomes central tenet of EU policy

These days, you don't get a choice. You join the EU and you're signed up to join the euro, perhaps not immediately, but eventually, and with a commitment to work towards it at a pace agreed by the partners.

No more British, Danish or Swedish opt-outs. The 12 states regarded as accession countries and whose accession negotiations have begun, half of them only last week, will join the EU as "countries with a derogation" - en route, but not yet there. No more "maybe some day" or optional extras. Euro membership is too central to what the EU is becoming.

Not that there has been a murmur of protest from them about the curtailing of their options.

The new realities of the markets of eastern and central Europe mean that euro membership is a key policy imperative for all the command economies in transition, whose trade flows have been transformed since the collapse of Comecon in 1991.

Today Poland, Slovenia, the Slovak Republic, Hungary, the Czech Republic and Romania all sell more than half of their exports into the euro zone.

In Hungary's case, it is 68 per cent; in Slovenia's, 62 per cent. Only the Baltic states have a substantial share of trade still focused on Russia and its satellites in the Commonwealth of Independent States (CIS).

With the notable exceptions of Poland and Romania, the accession countries are also significantly more dependent on trade than most of the countries they are joining in the euro zone.

In these 10 states, imports and exports together represent more than 40 per cent of GDP (as much as 80 per cent in Estonia and Malta). Their experiences as small, open economies are akin to those of Ireland.

Although representing one-third of the euro zone's population, they account for only 6 per cent of its GDP, which means they are very much receivers rather than setters of inflation and exchange rates.

Currency stability is critical for these trading economies and the relationship to the euro particularly important.

Already, many of them are beginning to position themselves to make that final transition easier. More or less formally, most of them have tied their currencies to the fate of the euro. Some regimes are very tight, others more flexible.

There are currency boards in three countries: fixed links between the Bulgarian and Estonian currencies and the euro/deutschmark, and between the dollar and the Lithuanian currency.

Others operate fixed pegs, Latvia to floating bands, Hungary to the euro and Poland to a currency basket (45 per cent dollar, 55 per cent euro). And then there are adjustable pegs - in Cyprus to the euro and in Malta to a currency basket.

The Czech Republic, Romania, Slovakia and Slovenia use managed floating, with the euro unofficially used as a reference. The short step they will soon make into the waiting room for euro membership, the new Exchange Rate Mechanism, should be relatively painless after such regimes.

Life in the ERM II, with its individually-tailored fluctuation bands, will even allow, as the European Central Bank puts it, "sufficient flexibility for accession countries to reconcile price and exchange rate stability with the structural evolution of the economies, thereby accommodating their different needs".

In other words, there is a growing recognition that the early imposition of the sort of rigidities required by the Maastricht regime of the first wave of euro members would be counter-productive. Transition periods could be significantly longer.

The economic culture of the euro zone has begun to permeate, however (see table). Deficit-reduction programmes are beginning to work, although with some backsliding, and inflation has fallen substantially, with some exceptions. Hungary is making progress, down to 9 per cent last year from 14 per cent in 1997, but Romania, although down from 60 per cent to 39 per cent, still faces huge problems.

Five of the acceding states, however, had inflation rates below 3 per cent and, with the exception of Bulgaria, the rest were in single figures. Key monetary policy features of the acquis communautaire - the body of law and procedures they must adopt as part of accession - have been taken on board already by most of the 12, with monetary stability a key statutory objective of most central banks.

Legislative convergence, particularly strict independence requirements, will have to precede accession.

On joining the EU, all the central banks will also become part of the European system of central banks and be required to consider their exchange rate policy as a "matter of common concern" and be bound by convergence programmes.

Any remaining inherent bias towards the state sector will be ended by a treaty obligation prohibiting monetary financing of the public sector or privileged access by the sector to the financial institutions.

Yet the truth is that today, in conducting monetary policy for the 11 members of the euro, the European Central Bank has a writ that already runs in practice far to the east.