It was word 1,047 and word 1,048, together, that did it. Of the 1,455 words in Atal Bihari Vajpayee's Peace Dividend speech, it was these two-'single currency'-that electrified vertebrae across the country. People sat up. Some sprang from their seats. Others wanted their ears examined.

Once again, the Prime Minister has shown that while being ahead of the curve is a necessary condition for leadership, mastery of timing makes a big difference. You could argue whether the words were uttered 22 days ahead of their time-or 22 years. But uttered they have been, and a common currency for South Asia is a proposal that demands immediate attention. Turning the dream into reality could take quite a while.

A good dose of economic realism would help. Token currency, in itself, was a historic breakthrough as a medium of exchange. It made wealth a function of the value generated by an economy, rather than a sum of the land's treasures. It needed the authoritative backing of a regime, though, its acceptance marked by territorial control. So nation-states turned currencies into macho symbols of identity and prestige.

Then came trade, and with it, more value-mapping and less power-tripping. If national currencies are an anachronism in this era of globalisation, it is because the benefits of monetary unification are obvious to anyone who understands trade. Even two trading partners can gain by combining currencies, ridding themselves not just of transaction costs, but also of the exchange rate uncertainties-which would boost trade and cross-border investment, to mutual benefit.

That's the theory. Actual currency mergers are fraught with nerviness. West Germany integrated the East by giving its residents one Deutsche mark (DM) for each ottomark they had, while the market exchange ratio was more like 1:6. The East's beer-guzzlers were thrilled by this 'generosity', but the befuddled East's businesses were rendered fatally uncompetitive.

For obvious reasons, the example of European Monetary Union (EMU) would be much more instructive. The preparatory 'convergence' towards the euro was far better planned, not least because it was a merger of equals. The agreement was to 'lock in' currencies at natural market rates, and submit to a common monetary policy. The assorted economies, therefore, had to synchronise their business cycles-and neutralise all controllables that could distort the relative purchasing power of currencies. The 'convergence criteria'? Keep the zone's inflation down within a strict band; and adhere to a Stability Pact on fiscal rectitude: nobody's deficit to cross three per cent (and government debt 60 per cent) of GDP. No currency stretching tricks to gain a sneak advantage just before the union.

After the 1999 lock-in, the euro operated in transition for three years on the principle of 'no compulsion', with adoption voluntary. Recently, though, this principle has been stretched to include the Stability Pact as well-now that Keynesian ideas have been re-adopted in an attempt to smoothen the ups and downs of the economic cycle. Has it rent the euro's fabric? Not on the evidence so far. The euro has been a success.

And in that success lies another big lesson. Sharp number-crunching is all very good. But convergence isn't just a matter of statistics. It's a whole lot more. The 12 euro-zone countries are not mourning the national symbols they lost in their respectively consecrated scraps of paper. This is a reflection of maturity, helped along, no doubt, by the post-nationalist charm of the euro's actual currency design.

As for their 'loss' of control over monetary policy, the debate in no longer whether governments should or shouldn't be setting interest rates. It is largely about how the European Central Bank (ECB) is managing regional economic diversity. Maturity, again. The ECB has gained credibility as an independent institution, and the euro could become a global reserve currency option.

South Asia, observers might scoff, is a long way from acquiring institutional credibility even within its own landmass. But such sceptics would do grave injustice to those who know a win-win possibility when they see it. To those who will not shirk the responsibility of working towards a single currency, no matter how thorny the progress. And to those who are wise enough, brave enough and stirred enough by the vision to ensure that if this bold project falters, it will not be for want of rectitude: fiscal or otherwise.