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Italy’s new government insists it wants to stick with the euro

Italy has no intention of abandoning the euro, the country’s new economy minister said, despite both parties in the coalition having toyed with the idea.

“The position of the government is clear and unanimous,” Giovanni Tria told Corriere della Sera newspaper in his first interview since the government was formed a week ago. “There is no question of leaving the euro.”

The anti-establishment Five Star Movement, which forms one half of the coalition, flip-flopped for years on the issue of ditching the single currency, but during the election campaign came down on the side of remaining in the eurozone.

The hard-Right League, the other half of the government, has a much more ambivalent attitude, with senior party figures saying only recently that they hope the euro will collapse from within, allowing Italy to exit.

The anti-euro message was thrust to the fore when the two parties jockeyed to form a coalition.

After three months of political paralysis which followed an inconclusive election on March 4, they put forward as their candidate for economy minister an economist and former minister who has called Italy’s membership of the eurozone “a German cage” and a huge error.

The candidacy of Paolo Savona was blocked by Sergio Mattarella, the president, but only after a tense stand-off which threatened to scupper the entire negotiation process.

In a significant climb-down, The League and Five Star withdrew him as their candidate and instead put forward Prof Tria, a little-known academic with more Europhile views who was acceptable to the president.

Prof Savona was instead given the consolation prize of being made European Affairs Minister.

Mr Tria was at pains to quash the ambiguities of the recent past, claiming that the coalition is united in wanting not wanting to revert to the lira.

“The government is determined to prevent in any way the market conditions that would lead to an exit materialising.

“It’s not just that we do not want to leave, we will act in such a way that the conditions do not get anywhere near to a position where they might challenge our presence in the euro.”

Prof Tria said that the coalition was determined to cut Italy’s enormous debt – a position that puts him at odds with the coalition’s extravagant spending plans.

The two parties promised during the election campaign to drastically cut taxes, lower the pensionable age and introduce a minimum monthly wage of €780 for Italy’s unemployed and poor.

Economists have estimated that the proposals could cost up to €100 billion a year, which would worsen the country’s debt, the second highest in the eurozone after Greece.

The coalition consists of the Five Star Movement, led by Luigi Di Maio (L) and The League, led by Matteo Salvini

Credit:
Tiziana Fabi/AFP

“We do not plan on reviving growth through deficit spending,” said Prof Tria, who will lay out the government’s aims and strategies in the autumn.

“These will be fully coherent with the objective of continuing on the path of lowering the debt/GDP ratio.”

He insisted that “the fundamentals of the economy are in place.”

A survey last week found that Italians’ faith in Brussels has plunged in recent years, but a majority want to remain in the Eurozone and the EU, despite their dissatisfaction.

Asked in the poll whether they still had faith in the EU, 56% said No while only 34% said Yes, with 10% undecided or not giving an opinion.

Despite that, 55% of Italians would vote to remain in the bloc if a Brexit-style referendum was held, the poll, conducted by Ipsos for Corriere della Sera, found.

If a referendum was held on ditching the euro, only 29% would vote to leave, with the rest undecided.

Just a week after the new coalition was sworn in, the first test of its popularity came on Sunday with local elections held around the country.

Nearly seven million Italians were eligible to vote in the elections, which affected 761 municipalities, from big cities to tiny villages.

Voting was to continue until 11pm local time, with the results expected to be known on Monday.

Article Source : https://www.telegraph.co.uk/news/2018/06/10/italys-new-government-insists-wants-stick-euro/

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