Decision day for the Government on the pound's entry level to monetary union appears to have arrived sooner than expected. The Greek decision to seek entry for the drachma into the exchange rate mechanism means that the key EU Monetary Committee is to meet in Brussels this weekend.

A perfect opportunity is thus created to change the pound's entry level into the single currency, if that is what the Government wants to do. Moreover, Irish officials attending today's meeting are likely to be told that our EU partners would not appreciate a later request to change the pound's entry level.

Whether the Government welcomes this sight of "Greeks bearing gifts" is open to question. Up to now the Minister for Finance, Mr McCreevy, has maintained a strict "button-lip" approach to the whole issue. This has led to an increasing view in the financial markets that the Government wants to join monetary union at our existing central rate in the ERM of DM2.41.

If it wants to join at a higher exchange rate, then the Government would seek a revaluation of this central ERM rate. Speculation that it was about to seek such a revaluation swept the markets late yesterday and led to heavy buying of the Irish currency. However, while the pound's rate is likely to be discussed, senior sources were last night playing down the possibility of a revaluation. Exporters would, of course, be delighted if we joined at the current central rate of DM2.41. This would be the lowest entry rate possible, thus underpinning their competitiveness, and would thus provide some protection against a future drop in the value of sterling. The powerful farming lobby would also approve.

In recent weeks, however, the other side of the argument has also been aired. Some economists have warned that we should lock in to monetary union at a higher rate to help control inflation. A higher exchange rate helps control inflation by lowering the price of imports.

The Irish Congress of Trade Unions has come out in favour of a higher entry level and a revaluation of the pound's central rate, conscious, no doubt, that this might support the purchasing power of importers. The Labour leader, Mr Ruairi Quinn, has also supported a revaluation to around DM2.50, in an interview in today's The Irish Times.

If the Government decides to take the opportunity to revalue the pound's central rate this weekend, then the currency will quickly settle around this level on the markets. Pressure will then build for interest rates to fall to the level of our EU partners.

On the other hand, if the Government, as appears likely, opts against a revaluation this weekend, then the markets will conclude that we will certainly join at our existing central rate.

With the pound trading above DM2.50 on the markets yesterday, this means that a decision not to revalue will spark heavy selling of the Irish currency early next week, driving it down towards its DM2.41 central rate.

This weekend they might decide whether that risk is worth taking.