Brass bands
TREASURY ministers contemplating the path of virtue are tempted aside by an ignis fatuus, or bubble of marsh gas, known to its infatuated followers as the Narrow Bands. It is (you guessed it) an optional extra in the European exchange rate mechanism. Move to the narrow. bands and you give your currency even less scope to fluctuate. Every so often the Chancellor tries to cheer up the markets by saying that he will move when the time is right. He hopes that the prospect will strengthen sterling and so give him more scope to cut interest rates. The
same was said before we joined the ERM, and that worked better in prospect than in reality. Joining the narrow bands, like join- ing the ERM, is a card we can only play once and is more easily played than revoked. Like joining the ERM, it is a temptation to those who believe that if we just pressed the right magic button, all would be well. This summer, though, Britain will have its turn in the presidency of the European Commission, ministers want to make the most of it — and how better to symbolise our commitment to Europe than to join the narrow bands? The gesture will be hailed by every true Euro- pean from Jutland to Palermo, except those who don't care or don't notice. It would combine two proven fatuities: gesture eco- nomics and gesture politics.
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