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Straws in the wind

Posted by Helen Friday, June 03, 2005

First it was the Germans, now it is the Italians. Or some of them. Earlier this week Stern magazine wrote of a meeting at which the German Finance Minister Hans Eichel and Bundsbank President Axel Weber had been present and where the possible break-up of the eurozone was discussed.

Subsequently Herr Eichel assured the world media that he thought the euro was in a very strong and healthy state, indeed, and participants assured Reuter’s journalists that neither Eichel nor Weber had participated in the discussion.

Maybe not. But neither did they flounce out of the room when such a heretical subject was raised.

Today the Italian Welfare Minister Roberto Maroni, of the reasonably eurosceptic Northern League, said that he thought Italy should go back to her own currency, the lira.

His comments came a day after Jean Claude Trichet, President of the ECB (he, whose appointment Blair was supposed to have fought or, maybe, not) made a statement to the press that the very idea that the eurozone could discombobulate was “absurd”.

Was it absurd, Signor Maroni was asked? Hmm, he growled, Trichet would say that. He was “one of those chiefly responsible for the disaster of the euro”.

There is no question that the Italian economy is in a severe crisis, showing negative growth for the second quarter. Maronis’s view is that much of the problem could be solved if the government regained control over the exchange rate and put up protective barriers round domestic industry.

So he really wants to go beyond simply leaving the eurozone and to take Italy out of the single market and, probably, the WTO. Whether that kind of protectionism would actually help anyone to achieve anything but a low level of subsistence is questionable.

Roberto Maroni is of relatively little importance even in Italy and nobody more senior in the government has made a statement on his comments. Still, straws in the wind, straws in the wind.