Sunday, April 21, 2024

Italian Welfare Minister Sparks Euro Controversy

Italian welfare minister Roberto Maroni thinks Italy should go back to having its own currency. Leaders of the European Union have deemed the idea of the euro zone breaking up absurd.

Maroni thinks that Italy should again adopt the lira as its currency. Italy used the lira until it became one of the 12 nations to start using euro notes and coins three years ago.

Italian Welfare Minister Sparks Euro Controversy The euro “has proved inadequate in the face of the economic slowdown, the loss of competitiveness and the job crisis,” said Maroni. According to Swiss Info,

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, wants to see Italy hold a referendum to decide whether or not to go back to using the lira, even if temporarily.

According to Analysts, 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.”

The dollar fell to $1.2307 versus the euro from $1.2265, but it remains up 2.3% against the euro this week. Against the yen, the dollar dropped to 107.62 from 108.29. The dollar is down 0.3% against the yen.

Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.

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