My take on the internal UK politics would be similar, but the Diary is written more from an Irish/Eurozone perspective.  Would the Eurozone countries really want to take on the grief of Brits whingeing at ECB polices in the way that they whinge at Brussels now?  Hell, even if the Eurozone rescued the UK from an Iceland meltdown (geddit) they would get nothing but grief in return.  I suspect Merkel would let the UK stew in its own juice - and as you suggest - the Tories would be more inclined to that POW as well.  The real question is whether the City would have the clout to call the shots - especially if London was losing its position as a centre for global capitalism to Frankfurt/Paris.

My suspicion is that the UK will join the Euro far too late, if at all, and that the Germans will not be over eager to accommodate them - as they are not now over eager to adopt the Brown strategy for European recovery.  Bottom line - Germany will call the shots.

notes from no w here