The Sketch: An economic catastrophe – and George is in ecstasy

It's perfect for him, because it's not his fault, and acts as a distraction from his problems

George Osborne was so relaxed, so smiley; even the subcutaneous sneer had sunk out of sight. Alistair Darling asked him if this bailout thing was proper money or the sort of "sophisticated financial instrument that caused the trouble in the first place".

"It's a sophisticated financial instrument," the Chancellor smiled. And everyone smiled. And he laughed, and everyone laughed.

If you saw him like this at a party you'd say it was a triumph of the pharmacologist's art. No, it's the euro-quake that's giving him this ease and poise. A monetary crisis is the Chancellor's equivalent of ecstasy.

What did we learn from his statement? That he is loving it. He's having the time of his life. It's a perfect storm for George, perfect in the sense that it's not his fault, it's a fine distraction from his domestic difficulties, he can assign the blame to it for any local failures of growth, and it's all about his opponents coming to grief in a way he always said they would.

But can he control the momentum it's given his own sceptics? Tony Lloyd, Wayne David and others – all of us, really – want to know. Bill Cash pulled out the sceptics' Big Bazooka. If fiscal union happens, "in what way does that not represent fundamental change?" And therefore require the promised referendum.

Cameron's advance position on this is that if no powers are transferred to Brussels then no vote. Will that argument endure? It may be solid but it lacks heart.

For instance, could the Chancellor assure Christopher Chope that the financial transaction tax was "dead in the water"? Nein, nein, nein. The eurozone is fully committed to such a tax, but George – he says – would never allow Britain to be sucked into that.

His insouciance may be punished. Bernard Jenkin has pointed out that Brussels can impose VAT on all financial transactions by a majority vote. That's not a transfer of power; they already have the power to do it and we have no veto. Even when the project is tottering in front of our eyes it still has an awesome reach.

Answering for the opposition, Rachel Reeves made her debut. She was terrific. A great find. She could do just a fraction less of the staccato duck, but there may be more duck-lovers out there than I think.

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