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| Europe |
| Italian Political Party Calls For Return To The Lire |
| 2005-06-09 |
| ... The subject of ditching the euro, once a taboo, is to become the focus of a big political campaign after the Northern League, a right-wing member of the government coalition, declared that it would fight next year's election on a platform of bringing back the lira. That will make Italy the first eurozone country where a promise to ditch the single currency has become the subject of an election, and it is a campaign that just might resonate. Even before the euro was launched three years ago Italy was seen as its soft underbelly, and things have only got worse. Italy has plunged into recession. Two days ago Brussels threatened the country with huge fines for breaking the euro's borrowing rules. Italians blame the single currency for rising prices, and polls show that more than a quarter would like to ditch it. Alasdair Murray, of the Centre for European Reform, said: "There are in most countries some anti-euro forces, but Italy is the first country where a party in government is making a song and dance about it. It is perfectly feasible there will be a country where a government comes to power promising to pull out of the euro." Roberto Castelli, the Northern League Justice Minister, announced that his party would present concrete proposals next week for ditching the euro. "Does sterling have no economic foundation because it is outside the euro? Is Denmark living in absolute poverty because it is outside the euro? Are Swedes poor because they are outside the euro?" he asked. The Northern League hopes to tap into a broad base of frustration with the euro, now popularly blamed for soaring inflation and Italy's economic problems. Polls show that two thirds of Italians still have problems with the euro, and one poll showed that 27 per cent wanted to return to the lira. The emergence of Europe's first mainstream anti-euro campaign marks the culmination of the currency's worst week. After the French and Dutch rejections of the European constitution cast doubt on the entire European project, the euro's value dropped to an eight-month low. The financial markets speculated over its future, with long-term interest rates on government debt starting to diverge in different eurozone countries. One British stockbroker predicted that it would collapse within a few years... |
| Posted by:Anonymoose |
| #3 There is a nationwide evolution going on here. For years the North has been the cash cow for central and southern Italy, and they resent it terribly. But they were at least guaranteed a modicum of respect by being the national breadwinner. However, with the coming of the Euro, the Rome government has ignored the North completely except to parasite off of it. A return to the Lira would keep Rome focused on at least mollifying them. |
| Posted by: Anonymoose 2005-06-09 18:36 |
| #2 I think this is a long term foot shooting incident. Italy will in time benefit from what little fiscal discipline is required by the EU regime. Otherwise it's back to biannual devaluations. |
| Posted by: Shipman 2005-06-09 16:11 |
| #1 Popcorn, please. :-D |
| Posted by: Barbara Skolaut 2005-06-09 15:00 |