British banks can't escape the euro debacle altogether
"There is no way," said a French official testily, "that France is going to hand power over its banks to an organisation based in London."
Dear me, no. Quite unthinkable. Who said national prejudice across the Channel was dead?
It's long live European Union but vive la France above all.
Unfortunately for Paris, however, the idea of handing over some sort of power over French (and indeed over all other European banks) to a London-based body is one of the options currently being pondered by European Commission officials.
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If the EU doesn't cobble together some form of banking union – which for all its grandiose terminology will be just a device for German and French taxpayers underwriting dodgy Spanish banks – then, the assumption is, the markets will finish the destruction of the eurozone. They won't just take down Greece. They'll take down Spain, too, and all hell will be let loose.
To be honest, the markets are already doing a good demolition job.
Hence the renewed scrabble for solutions that haven't been tried before.
Step forward a banking union. Any banking union needs certain elements. One is a set of common rules. Another is a single body to supervise those rules.
The EU has a candidate for this job. Sitting in London is the little-known and largely ignored European Banking Authority, which is a fledgling EU banking supervisor. Commission officials reckon this might be the ideal vehicle with which to drive forward a true EU-wide banking union to pacify the moneymen. The Germans are all in favour.
This doesn't mean it will happen. On the contrary, the evidence suggests that this ambitious scheme is a dead duck.
The Chancellor George Osborne has said there is "no way" British banks would join such a union.
The French last week made it equally clear they didn't want the UK involved either. They, like Mr Osborne, reckon the banking union should be limited to eurozone banks only.
For all Berlin's might, it cannot overcome the combined opposition of Paris and London even if that alliance is forged on wildly different motives. As a consequence, this month's pre-holiday summit of EU leaders will crawl towards the approval of the much more modest but infinitely more necessary banking union just for the eurozone.
We should not, however, naively jump to the conclusion that whatever the continentals do to their banks is nothing to do with us and that we can now safely ignore the subject.
We cannot. Not least because of the impact on British banks.
Our fifth-largest high-street bank Santander is Spanish owned. It has taken over numerable well-known British banking names such as Abbey, Bradford & Bingley and the Alliance & Leicester. It's also taking over 318 branches of RBS.
Although Santander UK is regulated by the British Financial Services Authority, it remains subject to its parent company which in turn will be subject to any banking union deal.
Perhaps the most pertinent point to make at this juncture for anyone with bank accounts with any part of Santander UK is that should the Spanish parent go belly-up, your money will not be at threat. The parent company cannot suck money out of the subsidiary to pay off its debts.
But let us return to the consequences of eurozone banking union. It would, at one level, be immensely in our interests.
If the Spanish banks went bust, the shock waves would reverberate across our shores.
Of course, the joy of a banking union limited to the eurozone is that the responsibility for underwriting all those dodgy debts will fall squarely on the Germans and the French, not upon us.
It is not, however, a win-win scenario. The City of London might well find itself under fresh pressure to bow to a Tobin tax – a tax on all financial transactions – which Downing Street has fought tooth and nail. The big question is whether that would be a price worth paying for the stability of the European economy and for our own possible escape from the economic downturn?