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A Mark, a Yen, a Buck or a Pound As soon as the ‘unthinkable’ becomes thinkable it also, and immediately, becomes sayable as well:
Italy’s labor minister called for a referendum to see if Italians want to temporarily bring back the lira after widespread popular discontent over high prices that many blame on the introduction of the euro.
Temporarily?
Meanwhile, rumours that the German government is looking to distance itself from the Euro are being ‘officially denied’.
Of course, none of this means that the Euro is going anywhere anytime soon or possibly at all but it would be fun to start a sweepstake on which Eurozone country will be the first to cut and run. For what it’s worth, my guess is France.
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my bet is on Italy, my adopted “second home.” Thank heavens they want to dump the Euro! the lira was so much more beautiful….
David, I dunno how much of the news you have seen today, but the euro dived in the foreign currency markets against the dollar and the pound. The markets take it seriously that Italy might want to leave.
To say that we live in interesting times is to put it mildly.
So what does this mean for personal liberties in those EU countries if they cut and run?
The joke is that a lot of people are against the Euro because of the central bank’s supposedly “tight money” policy.
Actually (as anyone who looks at the back pages of the “Economist” can see) the central bank is issuing Euro credit-money at a very fast rate – its policy is certainly not “tight”.
How does this affect personal liberty? Well if there are lots of currencies there is a least a chance that one of them will not be inflated by the govenment (at least not so much) and inflation (increase in the money supply – NOT increase in the “price level”) is the source of the boom-bust cycle. Looking at another nearby country is a good way to check how bad their government is – if things are under the control of a Europe wide state then comparisons are more difficutlt – and limiting statism is more difficult.
In short a centralised Euro monoply is even worse than lots of different fiat currencies (the fiat currencies of the nation states) – more ripping people off (via the inflation of the money supply) and more distorion of the economic structure leading to booms and busts – and all the demands for statism that the busts lead to.
It’ll be either Italy or Germany. Italy because it’s the first to openly think about it, Germany because it needs a softer currency as a quick fix to attempt to jump start a backsliding economy.
It would be even more interesting if there were mention of adopting a real gold standard somewhere.
Good article from Charles Moore today:
EU dreamers get a reality check – what’s in store for Italian euros?
Another interesting article in today’s Independent:
How we were talked into joining Europe
Michael Cockerell’s film ‘How We Fell for Europe’ is on BBC2 at 8.25 tonight (4th June).
If Italy left the Euro, it would be in the same situation as Argentine. Their problems, as well our own here in Germany, are self-inflicted.
Btw, personal liberties have nothing to do with the European Union or the Euro, for the individual member states, including Britain, do to the citizens whatever they please; should said measures prove unpopular, the govenments in question wil claim that Brussels made them do it. That way they can deflect the negative sentiments from themselves, and they even
get to keep the measures in place, for the protesters are too busy raling at the EU to get anything done bout them.
Btw, David:
You know that the ultimate goal of the Northern League is to have Northern Italy secede from Southern Italy?
Maybe the question should be who will be the last to leave the Euro? The Euro notes do not have a signature on them – I promise to pay the bearer teh sum of….. signed Chief Cashier.
So what does this mean? If the Euro collapses do we all get left with load of scrap paper. Is no-one underwritinmg this currency, or does the last one to leave take on all the debt.
It certainly will not be France or Italy that pick up the tab.