Test one Would joining economic and monetary union (Emu) create better conditions for firms making long-term decisions to invest in the United Kingdom?

In theory this means: We’ll all want to join the euro if staying outside scares away Japanese big business.

In practice it means: Nothing at all. No one can agree on how to measure better conditions.

Pro-Europeans say: Britain needs to join the euro soon or Nissan and Toyota will quit the country.

Sceptics say: Nonsense. Investors want well-trained employees and free-markets, not a single currency.

Test two How would adopting the single currency affect our financial services?

In theory this means: We’ll all want to join the euro if staying outside looks like killing the City of London.

In practice this means: Virtually nothing. No one can judge the euro’s real impact on financial services.

Pro-Europeans say: Panic! Everyone’s moving to Frankfurt! Sceptics say: Who wants to live in Frankfurt? And anyway it’s dollars, not euros, that count in the world of the money-men.

Test three Are business cycles and economic structures compatible so that we and others in Europe could live comfortably with euro interest rates on a permanent basis?

In theory this means: We’ll want to join if we boom and bust at the same time as the rest of Europe.

In practice it means: Quite a lot. Economists say the merging of economic cycles is the key test of Britain’s readiness.

Pro-Europeans say: The point has been reached now. Let’s go in while the water’s warm. Sceptics say: Our economy follows the US economic cycle, not the European one. The condition will never be met.

Test four If problems emerge, is there sufficient flexibility to deal with them?

In theory this means: Britain needs to be able to settle down once it’s joined the euro.

In practice this means: Nothing — apart from the fact that Gordon Brown doesn’t want to lose all his power.

Pro-Europeans say: The current system gives us the flexibility we need. Let’s join.

Sceptics say: When have Belgian bankers ever been flexible?

Test five Will joining Emu help to promote higher growth, stability and a lasting increase in jobs?

In theory this means: We’ll join the euro if it will help us get richer.

In practice this means: Very little. Economists are always wrong about the future — so why trust their verdict now?

Pro-Europeans say: Cost-savings and a giant open market will be a boon for Britain.

Sceptics say: Stability? Ha! Just look at the euro’s collapse in value.