The majority view expressed by Julian Jessop at Nikko Europe is that the chances of EMU going ahead on time have increased because the synchronised rise in European interest rates on Thursday confirms the increased political momentum towards a single currency taking effect on schedule. Rate rises also improve the chances of the leading players getting budget deficits below 3 per cent on time.
Stephen King at James Capel takes a similar view. But Robert Lind at ABN Amro is concerned about the impact of the fall of Mr Prodi's government on the grounds that Italy is less likely to go ahead.
However, the collapse of the Italian government could increase the chance of a technocratic government being formed which could implement the budget changes which political parties could find impossible to justify to their supporters.