Rodney Smith

There is something bizarre, a sort of political chaos theory, about the mutation taking place in European economic management.

After at least six years years of belt-tightening, high unemployment and general hard graft to get their economies down to the fairly conservative limits of the Maastricht corset, the main European Union members are now being run by centre-left governments whose instinct is to relax the reins rather than tighten them further, or even hold them in check.

Worst of all, in some ways, is the swiftness with which Europe's former hard man, Germany, is leading the rush to reverse.

It's increasingly clear that new finance minister Oskar Lafontaine has no doubts about who should be running European economic policy, and how. And it is not the Bundesbank or the European Central Bank (ECB).

Ironically, his attempts to persuade the Bundesbank over the last two weeks that it is, constitutionally, more politically accountable than it thought it was, and than it professes to be, could have been very useful to the French government during the row some months ago about appointing the first head of the ECB.

The French centre-left government of Lionel Jospin was and still is very eager that any central bank should be more politically accountable than the model which is usually held aloft, the Bundesbank.

Both Germany and France may now find that they are exerting the same pressure on the ECB to take into account more than mere price stability when it makes interest rate decisions. Both are anxious that it should adopt a social dimension when it is planning its monetary policy, much as the US Federal Reserve does when it considers employment.

But whatever European politicians try to do, they could not have picked a worse time to develop differences between themselves and the European Central Bank.