Pulaski

Almost all of them. There would be some short term pain, with the potential for huge gains after a couple of years and in subsequent years. Putting the Lira into the pre-Euro exchange rate mechanism, and later adopting the Euro, has been an unmitigated disaster for the Italian economy.

Beaverstate

True for Italy and most certainly Greece. Greece should have bailed out several years ago, yes they would have crashed, but much faster than their multi year train wreck . And recovery would have started before. Much like Iceland, not perfect but on a better path.

gioppino

Well, what do you expect Sue? Once you have tolerated inflammatory remarks such as: "Not genetically programmed to...", you can't then accuse the other posters to get under the collar. If there was a honest and fair moderation, this language wouldn't have been allowed. But because it has been allowed and possibly fostered, then BE is using double standards against those who disagree.

Capo Boi

'Putting the Lira into the pre-Euro exchange rate mechanism, and later adopting the Euro, has been an unmitigated disaster for the Italian economy.'

Not according to most Italians.

Recent polls have anything between 60% to 75% of voters, wishing to maintain the euro up from around 55% three years ago. Turkeys voting for Christmas?

To say the euro has been a disaster for Italy you must compare with the alternative. It's definitely not obvious that the Italian economy would have done any better sticking to the lire and may have done considerably worse. Plunging currency, high inflation, personal savings eroded, IMF bailout with imposed much tougher austerity measures, etc, etc. You can make that case just as easily.

HADENOUGHPIZZA

I'll go along with that , the euro has bought its share of troubles but there is nothing to demostrate that the lira would have been any better . To start with we used to get whole news items dedicated to the exchange rate between the lira and the US dollar and what this would do to petrol prices.

fleetwoodmac1975

Its funny how only my posts and the other italian lad's posts have been deleted. Maybe this forum is not so free after all

Pulaski

True, a declining currency brings problems, but having your own currency brings flexibility, whereas having localized inflation but being locked to the same currency as Germany creates problems that are virtually insurmountable - an increased cost base for manufacturing and services that cannot be mitigated.

What gives under these circumstances is employment - people lose their jobs, and the only "natural" solution is to go where the jobs are, which is Germany, but with language and cultural barriers that isn't happening, and won't happen.

And so we have the situation that Italy is in today, which by all accounts is a regular pickle, with a declining economy, rising debt, and a government that can't cut spending fast enough to stop the percentage of debt rising. ..... And in any case cutting spending further depresses an already slumping economy.

gioppino

Italy is one of the few countries in Europe that have mainly run a primary surplus (I don't know the latest figures, the last I have is mid 2013). The bulk of the public debt is due to interest repayments, at least the old ones, pre 2012 when the ECB started their own semi-quantitative easing). Italy is servicing its own debt at much more sustainable pace than many other European countries (only Germany and a few others do better) and surely better then the other PIIGS.

If Italy performed a partial default on foreign-owned debt and at the same time started printing its own currency (but only to service internal debt) then Italy could have killed two birds with one stone.

But this will not happen because the financial elite (whose headquarters are at the City of London) need a weak, vulnerable and patronisable Italy to keep the system alive. If Italy attempted to default, you would see the Nato and Allied forces invading Italy, BBC, CNN and FOX news talking of restoring freedom, rogue state, etc.

fleetwoodmac1975

Or reducing it to bare basics finances of your average italian family are much better than the finances of average families across the rest of Europe possibly excluding Germany.

Gipooino is right about partial default, I would not want the coalition of the willing bombing my parents home or the cobra committee meeting to discuss the invasion of Italy. I guess they could always reinstate Mr monti should they need to do so....

HADENOUGHPIZZA

How would Italy identify foreign owned debt ?

gioppino

Bonds that are in foreign banks.

Pulaski

Don't you think that's a little melodramatic?

HADENOUGHPIZZA

So if a foreign bank holds its italian bonds though a local custodian ? Or if a small retail bank from outside Italy uses a global custodian which in their turn sub deposits the bonds with a local one ?

fleetwoodmac1975

Isn't that what happened with poor old muammar?

One moment he is having dinner with Hillary and Tony, the next he gets bombed, tortured with a knife and then shot dead...coalition of the willing and all that
It would appear that trying to sell oil to other countries rather than France and proposing African monetary union cost him his life in the end...I mean they are trying the same with bashar but this one has a slightly more seasoned army behind him and the WMD false flag did not work

Pulaski

The last time I checked Libya has never been part of NATO or the European Onion, nor has Italy been sanctioned by the United Nations, or by the US under OFAC. Are you familiar with the difference between chalk and cheese? Well some he shipped off to Libya, and the others you can probably thank Israel for eliminating.