The head of Germany's Ifo economic institute believes Italians will eventually want to quit the euro currency area if their standard of living does not improve, he told German daily Tagesspiegel.
The standard of living in Italy is at the same level as in 2000. If that does not change, the Italians will at some stage say: 'We don't want this Euro zone any more', Ifo chief Clemens Fuest told the newspaper.
He also said that if Germany's parliament were to approve a European rescue program for Italy, it would impose on German taxpayers risks the size of which it does not know and cannot control. He said German lawmakers should not agree to do this.
Italy is not seeking such a rescue program. The government in Rome is focusing on underwriting the stability of its banking sector, starting with a bailout of Monte dei Paschi di Siena.
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The Euro was a bad idea right from the start. Currency union without fiscal union isn't sustainable long term, so if those countries aren't going to go ahead with the fiscal union they may as well disband the Euro now and get it over with.Jan 02nd, 2017 - 01:00 pm 0
I do wonder what would have happened if the UK had joined the Euro though. With our giant national debt, probably we'd have needed a bailout just like Ireland, but not even Germany could afford to pay it. The UK would have been forced to leave the Euro, and surely at least Greece and probably several other struggling countries would have followed. Who knows if the Euro could survive that scenario.
If other Countries are considering being in the same situation of leaving the Euro zone (can they leave the currency and remain in the Union, it's not clear from the article)?Jan 02nd, 2017 - 02:25 pm 0
This might work out well for the UK in the coming negotiations...
Just as well we stayed out of the Euro,Jan 02nd, 2017 - 07:31 pm 0
but if Italy does go back to its own currency,
how long before others do the same,
and who would be likely candidates.?