Getting Nostalgic About The Lira?

As Italy's funding crisis dominates talks among EU finance ministers in Brussels, we would like to draw your attention to a piece written by Claudio Borghi, commentator for Italian daily Il Giornale (owned by former Italian Prime Minister Silvio Berlusconi's family).

The article carries the headline, "The return of the lira can get us out of economic crisis" and sets out a very straightforward argument,

"If you were told that you suffer from heart disease, that you can’t carry on for long and the only two chances you have of survival are either a transplant or a mechanic prosthesis, you would certainly not waste one minute, you would inform yourself swiftly, you would assess the pros and cons of the various alternatives, and especially their feasibility. If, for example, the transplant were the preferred option but no donor were realistically available, then it would be logical to prepare for the prosthesis quickly."

"But in Italy logic seems to be lacking. Even the slowest-reacting economists are starting to think that a definitive solution to the eurozone crisis…can only be via two paths: an overhaul of the ECB, which allows it to guarantee eurozone debt (all of it)…or the return of national currencies. Given that the initially easier solution – the ECB’s guarantee – cannot be taken for granted and depends on external factors (notably the will of [German Chancellor Angela] Merkel, who seems unwilling to listen on this issue), it is absolutely incredible that debate on the only one of the two possible ways out of the crisis within our control – the return to the lira – is non-existent."

Borghi continues with an obvious attack on Italy's newly-appointed Prime Minister Mario Monti - as we said, Il Giornale is owned by Berlusconi's family,

"We know what Monti thinks from his previous writings. His goal is a Europe of technocrats, a super-parliament taking the lead of economic and fiscal policies, (maybe) letting nation states decide autonomously on the colour of flower boxes. If everyone likes this plan, that’s just fine. But if [Italian] political forces still had some backbone left, they would have the moral duty to prepare for the alternative."

His conclusion is,

"[Italian] politicians had better inform themselves and the people. And a serious debate on the return to the lira had better kick off, free of all those absolutist positions (a typical one is, ‘It would spell disaster’ – as if the present situation was heaven) without a shred of reasoning."

To be fair, Mr Borghi remains quite an isolated voice in Italy's broadly pro-EU/euro press, at least for the moment. However, as Italians gradually realise that they may be facing many years of austerity, in large part imposed as a result of huge political pressure from France, Germany, the European Commission and the ECB, more voices may join him fairly soon.