By: Gilberto on Mercoledì 18 Maggio 2005 22:06
Italia fuori dall'euro ?
---------------------------------------------------
May 18 (Bloomberg) -- Looking for a bet on Europe's most unexpected economic event of the next decade? How about a wager on Italy leaving the euro area? Who knows, you might even be able to collect your winnings in lira.
In the past few months it has become painfully clear that Italy, which was the euro's most fervent supporter before the single currency's introduction, is its most prominent victim.
No other country has suffered so much from the disciplines that the euro imposes. The door marked ``Exit'' must be looking increasingly attractive.
That Italy has now been plunged into an economic crisis is clear from even a cursory glance at the figures.
Last week, it was announced that Italy had slipped back into recession, the country's second in two years.
Gross domestic product shrank 0.5 percent in the first quarter, the steepest drop in six years. That came after a contraction of 0.4 percent in the previous three months, according to the statistics office Istat. In total, the Italian economy, the fourth-largest in Europe, has lagged behind the rest of the euro area in eight of the last nine years. It has dropped to 47th place in a ranking of competitiveness compiled by the World Economic Forum. No other major economy in Europe has such a dismal record.
Don't expect it to get better anytime soon. ``Problems of specialization and necessary restructuring cannot be postponed indefinitely and regular devaluations are not a solution, either,'' said Olivier Gasnier, an economist at Societe Generale SA in Paris, in an e-mailed response to questions.
`Constant Devaluation'
``In the past, the Italian economy relied on the oxygen of constant devaluation,'' Guzzo said. ``Now it needs to look at structural solutions.''
Because the euro is weighing on the Italian economy, the lira is now viewed as part of a golden age.
Nobody is preparing to abandon the euro right now. In a television interview this month, Italian Prime Minister Silvio Berlusconi ruled out a return to the old currency. Still, if such an action were impossible, you wouldn't need to rule it out. When politicians deny something, it is at least a topic of discussion.
Could it happen?
There are few technical obstacles to getting out of the euro. Yet only an Italian leader of impeccably pro-European credentials could do that. Funnily enough, the most likely person to become Italy's next prime minister is just such a man. Romano Prodi, the former president of the European Commission, led Berlusconi in an April poll by SWG Srl, with 61 percent support. Nobody could accuse Prodi of wanting to undermine the European Union.
Italy's economic woes will trigger a departure from the euro area? It's a long shot, though it may be worth a bet.
