Ta­jani warns against ex­it­ing the euro

Financial Mirror (Cyprus) - - FRONT PAGE -

This year’s “State of the Union” con­fer­ence opened in Florence on Fri­day, co­in­cid­ing with the news that Italy is likely to get a coali­tion gov­ern­ment of two Eu­roscep­tic forces, both keen on leav­ing the eu­ro­zone. Speak­ing at the event, Eu­ro­pean Par­lia­ment Pres­i­dent An­to­nio Ta­jani strongly warned Italy against ex­it­ing the euro.

Ta­jani, a politi­cian from Sil­vio Ber­lus­coni’s Forza Italia, was seen un­til re­cently as the prime min­is­ter of a new Ital­ian gov­ern­ment, ca­pa­ble of re­as­sur­ing the rest of the EU thanks to his strong Eu­ro­pean cre­den­tials.

How­ever, the lat­est twist of events ex­cluded Ta­jani from such a sce­nario. The far-right North­ern League had run in the elec­tions in coali­tion with Forza Italia. How­ever, a coali­tion be­tween the League and the anti-sys­tem 5-Star Move­ment be­came only pos­si­ble af­ter Ber­lus­coni’s Forza Italia agreed to ac­cept not to be part of the fu­ture cabi­net.

A ma­jor­ity of Ital­ians are sup­port­ive of the EU, but less so of the com­mon EU cur­rency, as its in­tro­duc­tion in Italy had led to price hikes and is seen as the main rea­son for the eco­nomic cri­sis.

The idea of hold­ing a ref­er­en­dum for leav­ing the euro was one of the main po­lit­i­cal ideas of Beppe Grillo, the for­mer comic who has built the 5-Star Move­ment into Italy’s largest po­lit­i­cal force.

North­ern League leader Mat­teo Salvini has also said that the euro was “a mis­take” for Italy’s econ­omy. Salvini ad­vo­cates rene­go­ti­at­ing Eu­ro­pean treaties and in­sists the sin­gle cur­rency is doomed to fail.

The League wants to exit the euro as soon as po­lit­i­cally fea­si­ble. Luigi di Maio, the new 5-Star leader, has said such ref­er­en­dum would take time to or­gan­ise and tack­ling poverty in Italy was more ur­gent.

In a 31-minute speech, Ta­jani warned twice against ex­it­ing the euro. Ex­it­ing Europe makes no sense, just like ex­it­ing the sin­gle cur­rency makes no sense, he said.

He later added it was “ir­re­spon­si­ble” to even imag­ine a ref­er­en­dum for leav­ing the euro and warned that in such a sce­nario, there would be reper­cus­sions in the en­tire EU and its 500 mil­lion peo­ple.

He also com­pared an exit from the euro to the Ar­gentina cri­sis of the early 2000s, when the coun­try de­faulted on its ex­ter­nal debt.

The Greek cri­sis was an eye-opener for re­al­is­ing that EU treaties haven’t pro­vided for a pro­ce­dure for ex­it­ing the euro. Le­gally, if a eu­ro­zone coun­try leaves the euro, it would leave the EU as well.

Com­mis­sion Pres­i­dent Jean-Claude Juncker also spoke at the event but made no men­tion or al­lu­sion to Ital­ian pol­i­tics in his 36-minute speech.

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