Italy should stop using the euro and go back to having its own currency says Italy’s welfare minister Roberto Maroni. European Union leaders find this idea “absurd”.
Maroni wants to see Italy go back to using the lira as its currency again. This is the currency Italy used until it became one of the 12 countries to using euro notes and coins in 2002.
Analysts said Maroni’s comments should be seen as populism typical of the Northern League. They do not represent the government as a whole and are not the harbinger of any dramatic political initiative.
The comments go beyond the usual anti-euro sentiment, which increasingly laces the rhetoric of Prime Minister Silvio Berlusconi and other ministers as Italy buckles under economic recession and a burgeoning budget deficit.
Maroni, a member of the Northern League party, says that Italy should hold a referendum to decide whether or not to go back to using the lira, even if only temporarily.
Analysts say that if Italy returned to the lira, Italy would have much higher interest rates and debt related costs, which would cause the country’s deficit to increase dramatically.
“Italy’s recession is worsening … we can expect more of this kind of declaration given the deterioration in the economy and the domestic political climate,” said analysts of SocGen.
The U.S. dollar has fallen against the euro as well as the yen as job growth in the United States has slowed more than expected according to a government report.
“It shows that there is a soft patch and maybe even a generalized slowdown,” said currency strategist Aziz McMahon. “Definitely the U.S. and European economies are slowing. Rates are going to peak soon. It’s a dollar-negative number.”
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
