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IS IT the end, or the beginning? A single currency for Europe was dreamed of by Charlemagne and Napoleon. Plans for one were formed then abandoned in the 1970s. The decision to go ahead was eventually taken at a European Union summit in the Dutch town of Maastricht in 1991. This week new notes and coins were issued in the euro area's 12 countries. From Lapland to the Azores, the single currency is a reality.

Onlookers, groping to capture the significance of the event, note that no currency has circulated so widely in Europe since the Roman empire. It is a provocative comparison, for it raises the biggest political question about the venture. Will the euro, the most dramatic building-block so far in the making of a new Europe, inexorably lead to a pan-European political union? Or is it just a convenient currency and nothing more?

Defenders of the “just a currency” line point out that countries can share a currency without political unity. The gold standard, a de facto common currency, operated for decades without any impulsion towards a political union and indeed through several wars. On a smaller scale, Britain and Ireland long shared a currency, as did Belgium and Luxembourg, as do a clutch of West African countries—with no suggestion that monetary marriage should inevitably lead to political fusion. Yet others respond that currency unions that do not follow on to political union tend ultimately to break up. A Latin Monetary Union prevailed among France, Belgium, Italy, Switzerland, Greece and Bulgaria from 1865 until 1914, for instance, but came to grief with the first world war.

Many eminent European leaders do indeed believe that the euro is not merely a symbol of European unity but also the potential instrument to drive a whole new round of political integration. Joschka Fischer, Germany's foreign minister, argued in a speech last year that the creation of the euro was “a profoundly political act”. The European Union, in his view, must now “make good the shortfall in political integration”.

It is one thing to talk in general terms about the euro spurring closer integration. The controversial question is, “What sort of integration?” One popular idea, promoted by both Lionel Jospin, the French prime minister, and Romano Prodi, the head of the European Commission, is the appointment of a Mr Euro, a single economic spokesman, who could speak in international economic forums for the entire euro-zone. Other ideas floated recently by several European politicians include the harmonisation of corporate and other taxes, and the creation of a bail-out fund to help countries in economic trouble.

The idea of such a fund is an illustration of how supporters of the euro hope to turn it into an opportunity for further integration. Mr Prodi says openly that the lack of economic flexibility in the euro-zone means that “some day there will be a crisis and new economic-policy instruments will be created.” He is right that options open to countries with a national currency, notably devaluation and an independent monetary policy, are no longer open to members of the euro-zone. So what new forms of flexibility might they therefore need? Mr Prodi is vague, but he seems to imply that the Union should greatly increase its central budget, so that any country hit by a shock unique to itself could be bailed out.

An odd kind of flexibility. And odd for the head of the European Commission to speculate openly about the risk of an economic crisis in the euro-zone. But pro-Europeans know well that an atmosphere of crisis can generate just the right mood for great leaps forward in political integration. Consider, for example, how September 11th created the political momentum for the creation of a pan-European arrest warrant.

The problem with this crisis-driven model of integration is that crises are by their nature unpredictable. At present, the euro country that looks likeliest to hit trouble lies at the heart of Europe: Germany, which is struggling to keep its budget deficit below 3% of GDP. The 3% figure is crucial because the euro countries have donned a fiscal straitjacket called the stability and growth pact, which is intended to prevent any one country running up debts that undermine confidence in the euro. Adopted, ironically, at Germany's behest, the pact provides that any country breaching the 3% ceiling could be subject to fines as big as 0.5% of GDP. There are let-out clauses for deep recessions, but Germany looks unlikely to qualify.

Fines on the scale laid down in the stability pact look unthinkable—but if a breach of the limits went unpunished, the infant currency could suffer a big blow to its credibility. The trouble is that the stability pact, far from creating more of the flexibility that Mr Prodi craves, actually creates less. The true flexibility that Europe needs ought to come from scrapping remaining barriers to competition and further deregulating labour and product markets—changes that many governments, including Germany's, are resisting.

The same flexibility test should be applied to plans for closer “political union”. The notion that the euro would impel closer political integration was not spelled out when the members of the euro-zone first agreed to the idea of a single currency. To suggest that it is now necessary is another example of the sleight-of-hand that has done so much to undermine popular faith in the European Union. If the euro-zone countries want to introduce greater flexibility, they should look at their excessive regulation, not at more political integration.

It is true that previous currency unions have foundered for lack of a political union. But Europe, let us hope, is unlikely ever again to face an “asymmetric shock” as strong as German unification or a major continental war. The euro is a powerful symbol of European co-operation. With luck it will bring more economic benefits than losses. Long may it flourish. But that is not to say that Europe must now proceed to closer political union. On the contrary, the union has a new currency to digest, a dozen would-be members knocking on the door, and a public whose support for these already-ambitious initiatives is wavering at best. Until further notice, enough is enough.

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