LAST week 2m Slovenians decided that their country should ditch the tolar and become the 13th member of the euro single currency.

With the euro rising to US$1.33 and hostility to it growing in parts of “old Europe”, especially France, this was a badly needed boost for the European Central Bank. It had spent Christmas toasting the fact that for the first time the value of the euros in circulation globally exceeds that of US dollars.

This feeds its view that the euro can displace the dollar as the international reserve currency and whets its appetite for yet more punishing increases in ECB base rates that could have a disproportionate impact on the credit-guzzling Irish consumer.

The shapes being thrown by the ECB suggest serious long-term intent. Six quarter-point increases in the ECB “repo rate” have cut the interest-rate differential between Europe and America by half a percentage point in less than a year and helped the euro to its current high levels.

There may be more to come. But the strain is already being felt in France, Italy and Portugal.

In France, the Gaullist presidential candidate Nicolas Dupont-Aignan has called for a return to the franc. Opinion polls show 52% of the French now regard the euro as “bad”, while informal surveys in the French media claim it has pushed up the cost of household staples by 80% over five years.

Not every member of France’s political elite would back the Gaullists’ populist demands, but three members of the current cabinet — the prime minister, Dominique de Villepin, the finance minister, Thierry Breton, and the external trade minister, Christine Lagarde — have called for effective political control of the ECB’s rate setting. According to de Villepin, this means “taking back our sovereignty and our margin for action so that states can play their part”.

Two serious contenders for the French presidency this spring, the socialist Ségolène Royal and the centre-right candidate Nicolas Sarkozy, also support the policy of political direction at the ECB, a move that would turn the ECB’s French-nominated chief, Jean-Claude Trichet, into the equivalent of a monetary eunuch.

For Ireland, Europe’s most open economy, in which exports reached €88 billion in 2005, the stakes could not be higher. This is already a high-cost location, the second most expensive in the eurozone, and inflation is rapidly heading towards 6%, according to the Economic and Social Research Institute.

Much of our industrial base, particularly the IDA-backed sector, which comprises 135,000 important jobs, is sensitive to exchange-rate movements. Managers of multinational subsidiaries are trying to wrestle with a cost base denominated in euros, while selling into markets where goods are priced in dollars or to other parts of their own corporations where internal trading is conducted in dollars.

Worse still, Irish traders now face currency risks on two fronts. Leading global banks believe sterling is fundamentally overvalued — by 13%, say Goldman Sachs — and predict sterling weakness throughout this year. Could Irish exporters spend the next year trying to grapple with both sterling and dollar weakness simultaneously? We sell almost 20% of our exports into the UK directly, and any sterling weakness could be problematic for many exporters, particularly as cost structures here are higher than in parts of Britain.

It is not possible to determine precisely how much of Irish exports is invoiced in dollars, or sterling for that matter. Irish trade figures are as clear as mud.

In the first eight months of last year, for example, “chemicals” — mainly organic chemicals, medicines and pharmaceuticals — accounted for a ludicrous €28 billion of €57 billion in exports. Part of this “export” total is internally traded within American corporations, another part within European-owned corporations.