Will Italy Exit The Euro?

Rosie

Rosie

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Apr 6, 2013
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Italy
There have been many speculations about Berlusconi's idea that Italy should exit the euro and print it's own money, which to some is a good idea, to others it's just crazy talk. Whether this is a good idea or not, I don't think anyone can know, things can go either way. Italy is already in a tough spot, so they do it, Italy may rise again or it may sink even deeper...

Well, I don't really know how the politics world works, but it seems that there are 2 Italian parties who have big plans, they're trying to get Italy to be independent again, and stop using the Euro (because, according to many, the fact that Italy renounced its Lira is what created all this mess in the first place).

So, they're (as in, the politicians) talking about organizing a referendum so that the people can choose, Italy stays in the euro zone or Italy's out. Some politicians even want to adopt an anti-immigrant and anti-EU position.

What do you think? Will Italy remain in the euro zone or will it not?
 
Many people are unhappy with how the EU is working out, I always knew it would be a disaster and it is, politically, socially and economically. I am in the UK and as you know there is talk for a referendum to leave and I feel many countries are watching the UK, as they clash with EU policies all the time.

I preferred Italy with the Lire, I mean I learned all the high numbers and how to say them back then so I could barter for shopping! I don't think it will be a bad thing to leave the Euro as Mediterranean countries work differently to others economically and there are many people who live in rural villages very happily and the Euro has made life so difficult for them. (Tax and inflated value of the Euro has made the cost of living higher than the earning capacity of many)
 
That is true, unfortunately. Everyone was praising the idea of using one currency in all of Europe and look what happened!
My home country and most East European countries, for that matter, are still not using the Euro. But they plan on making the change in the next few years (few.. as in the next 2, 3, 5 years, not 10. So, soon). I still don't know how this will affect these countries, but if Italy and other countries managed to get themselves buried deep in debt and troubles, I can imagine that the same will happen to others.

I didn't know the UK had such problems as well, I don't always understand politics :P However, Italy wants to close the borders for foreigners, which to me sounds kinda crazy. Sure, it's a good plan to keep the "bad people" out, but it can also mean this will affect the other EU countries. I don't know... It should have been so simple, yet everything became complicated over the last few years.

And speaking of foreigners, did you guys see the news about how politicians earn way too much money from 'protecting' the nomads? I don't see Italy closing the borders anytime soon, this would mean the source of income of many politicians will not be able to get into the country anymore, haha! I'm really curious about what's gonna happen. We will see, in about a year, if a referendum will be organized for the people or not.
 
It makes me really sad to hear about the mess Italy is in. I don't really understand how economics and politics work, and it seems crazy that the day to day living standards of ordinary people are controlled by banks, big companies and international financial markets.
I read the other day in Italia magazine some quotes from The Spectator regarding Italy:
"Italy's inevitable demise is a foregone conclusion. The country is just too much of a basket case to even think about. Italy is the dying man of Europe" The Italia journalist agreed "the macro-economic facts are just too awful to contemplate. The whole system faces inevitable collapse"
I don't really know what that means in terms of what will happen to the country and the people, but the figures are not good. 43% youth unemployment and national debt is 135% of GDP, the third highest in the world after Japan and Greece.

It's quite distressing to read these things about a country I have come to love dearly. One of the things I love about Italy is that there are so many small independent business producing local food, local shops, wine, artisanal produce, and there are very few huge chains and indentikit supermarket shops and branded restaurants. What I fear will happen is that big international companies will become more dominant and it will become more globalised and less unique and distinct, and that the famous quality of Italian produce will be compromised by making things cheaper.

The EU has indeed not worked well for small business, the EU favours big companies, wanting to make Europe more like America (shudder!) and making regulations and taxes for small business harder and harder. I owned my own restaurant for 4 years and I made enough money to survive but it was hard to make a good living, there are so many costs for small businesses here in the UK too that make it hard.
There has been a bad financial crisis in the UK too, and although the economy is recovering, people are still feeling the pinch of austerity and slow growth. In Italy it seems to be far worse. The Euro has not worked for them, in fact only Germany seems to have done well out of the Euro and the EU....
Is the Euro to blame though? Financial problems seem to be all over the world, America has huge debts, so does Japan, even China's rise is stalling. Maybe it's not the EU or the Euro, maybe Capitalism has failed.

There is a movement in the UK to leave the EU too, led by a largely rascist party of idiots called UKIP. They, and many others it seems, blame immigration for our troubles, but that has nothing to do with it. I think free movement is a good thing, 2 million Britons live in other European countries, 2.2 million Europeans live here, no problem, they work hard and are mostly good people. I think it is important to have close ties with our European neighbours, and don't forget we have had peace in Europe since 1945, people should be careful what they wish for. However I do agree that the EU is not working for people, the centralised bureaucracy from Brussels is the problem and the EU needs to change or collapse and start over, maybe scrapping the Euro. Regulations and laws from the bureaucrats in Brussels do not work well for ordinary people, in my opinion we need to stay closely tied to each other, with free movement, but have control of our own laws and infastructure, because we are all different, we can't pretend to be a United States of Europe, our economies, our societies are all different.
 
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One thing I don't understand is, whenever I have been to Italy, tourism seems to be thriving, restaurants and hotels are full, lots of people spending money. There must be jobs in tourism and catering and lots of businesses must be making money from tourism. Apart from London, Italy seems to me to have far more tourists than the UK. Surely that must help the Italian economy.
I also know that Italian politics suffers from corruption and inefficiency which must make the problems worse.
 
From what I have seen and I know many small Italian family businesses are run and can tick over, they employ family who aren't always the best workers, but you keep it in the family. Establishments profit by opening all day, Italian places only open for lunch and dinner and many only dinner, so they have to make profit from that alone and they don't turn tables as they do in other countries.

It's a different way of life and the cities are no different, some will close for the afternoon. Taxes are high in Italy and tourism is seasonal like many places, so that income has to keep people going until the next season.

For industries the EU works, but even if it wasn't in the EU trade agreements could be in place to help. The north seems fine, but it's the south that suffers and there is still the resentment that the northerners support the southerners.
 
There is no chance what-so-ever that Italy leaves the Euro, if not even Greece left! The fact is that if any country leaves the Euro the EU comes to an end and that is a reality that no one wants to discuss, at least for now.
 
Peninha said:
There is no chance what-so-ever that Italy leaves the Euro, if not even Greece left! The fact is that if any country leaves the Euro the EU comes to an end and that is a reality that no one wants to discuss, at least for now.
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Unless it is France or Germany leaving the Euro will remain a withering currency. Greece can't leave as they are now dependent on the EU. The Euro should be disbanded, it should never have happened IMHO and many other economists. The social fallout is something they never considered and expected people to adapt.

Nothing is impossible, but as their currency and politics are all tied together they would have to work out an exit strategy and people are just trying to survive right now.
 
I really wouldn't want to be Italy leaving the Euro and going it alone. The country needs Germany and France to be there to help prop it up at the moment. And tourism alone wouldn't be enough to sustain the economy. It needs regional trade. If the Lira was brought back, I just wonder how long it would take for it to completely collapse in value against the Euro, given the lack of economic strength to back it.
 
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Exiting the Euro requires an honest and really competent political leadership, low public debt and reasonably contained public spending.
Italy doesn't have anything of that.
 
Hermann said:
Exiting the Euro requires an honest and really competent political leadership, low public debt and reasonably contained public spending.
Italy doesn't have anything of that.
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Did it ever? I'm not sure if any country has all of the above. The world would be a better place, and a country with all three would be an ideal place to live in. There are countries worse off than Italy (Greece, Cyprus and Spain) and countries should learn from their mistakes and avoid them.
 
It's debatable, but I agree with Hermann - it would require a strong and competent political leadership.

I mean, just think about it - Italy was in the EU ever since the beginning - it was one of the very few founders, even back then when it wasn't named EU yet (ECSC - European Coal and Steel Community, the first EU). It's such a long tradition. Breaking with it... well, let's just say it will be a very difficult path to thread.

Right now, it's true that there are counties worse off than Italy, but you must never forget that the official story (about Greece being ''lazy'' and such) is just one version of it (version of the ''higher'' powers). I don't really understand much, but my teacher (who is really interested in economy) keeps reminding us to think - all of those who had given money to Greece will collect so much more - they have an interest in investing. Their money won't be lost, even if Greece bankrupts - someone will pay them back. But how can you really learn from someone else's mistakes - isn't the whole history just the repetition of them? People keep making the same mistakes, over and over again. But, if you're interested in this, you should check out this book:
Ill Fares The Land, Tony Judt
I've read some of it and it's a real eye opener. He truly was a great economist and thinker.
 
No country has it all, but competence is the very minimum, you can't have Schettino at the helm while attempting a dangerous maneuver.

The reason of exiting Euro would be to devaluate Lira the minimum needed to boost exportation, and would be good to do it.
But a less competent or just criminal leadership would devaluate Lira way more than needed, printing mountains of money so they can steal it and drowning italian economy under the weight of imported raw materials price.
 
Most governments have an element of corruption, even the EU so there is no perfect system. The problem is now people want transparency and the increased powers means other countries are interfering with each others policies.

I'm not sure about your teacher @Aurelia, but Ireland suffered the same fate with the Euro and they are not a lazy country. Who will pay them back? It's the collected funds from other countries like France and the UK that are funding Greece and the others and they won't get their money back. Meanwhile a whole Greek generation suffers, the buyout only covered the banks debts, it did not inject money into the government or welfare services.

I'm sure most countries have a secret exit plan that they have considered.
 
Greece is the condition that we all know and the EU will not kick it out from the Euro, so no way Italy is going out, when that happens the EU will come to an end as Italy is one of it's main members.
 
It is a discussion worth having however I feel that Italy still needs the support of the EU. It is a tricky situation with Greece in mind and how its impacting the rest of the EU. However I don't think Italy is in a strong enough position to be independent.
 
The rules of the EU are always changing and no one gets 'kicked out' of the EU or Euro, but one can leave if they choose to though it's not easy to do so. Changing over had its issues and leaving with also have its problems if it ever happens. Maybe countries will not have a choice, at one point all countries had to be independent and there are some independent countries that are a lot worse off then Italy or other EU countries.
 
in my own opinion i don't think it is right for Berlusconi to lead Italy out of the Euro at this point because the truth of the matter is that with time i believe the Euro would stabilize.
 
Given the situation in Greece which is worse than Italy, it marks a new vision, that terms should be negotiated and I am sure Greece would prefer to leave the Euro if it could. It can't right now, but I think if it was an option it would be a popular one. As a result the Euro is low against the dollar which affects all the countries with the Euro, so this instability isn't good and it's possible other countries may feel the same way. Isn't that another reason to leave the Euro if you can't control the economy?
 
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