Italy faces 'horrible martyrdom' while in the eurozone

Telegraph UK ^ | May 20, 2005 | Ambrose Evans-Pritchard

[a freedom-loving italian]

Italy faces 'horrible martyrdom' while in the eurozone

Italy is in much the same mess as Argentina in the last throes of its disastrous dollar-peg and faces a "horrible martyrdom" as long as it remains inside the eurozone, according to a market report issued yesterday.

Banque AIG, the financial wing of the US insurance giant, said Italy needed a 20pc devaluation to prevent a slump and a "horrendous" explosion of public debt.

[DManA]

They're hurting because they can't compete with the rest of Europe. Why is that?

The Italians are hurting because the Euro

[shaggy eel]

Once upon a time, a man ended up with children as Nature's fee for the man getting his rocks off.

,,, that's pretty simplistic. I'm one of those guys who actually likes kids. I've got a new one, ten weeks old now. I have a daughter from a first marriage who will be fifteen tomorrow and a son who is twelve. They've given me a lot to smile about over the years and that's how I've come to measure my standard of living. If Alitalia stock falls below its present 32 cents, for example, do you think I'll look worried? A lot of people seem to validate themselves on the basis of a new home theatre system, a summer house or negotiable bearer bonds. Good luck to them... they're things that don't smile back at you. Standard of living is an objective thing but pretty transparent in terms of how its measured in Italy... just my two cents and I've only been there once.

[Malesherbes]

Hard to find any fans of the euro. The Germans call it the "Teuro," a play on the German word for expensive.

I note that Warren Buffet is now bullish on the British pound instead of the euro. Either through wisdom or sheer dumb luck the Brits stayed out of the Euro-Zone, and stayed out of the European Central Bank, and are prospering while continental Europe stagnates.

I love Italy and its people. It may take a crisis to bring things back to where they should be, but I wish Italy well.

[a freedom-loving italian]

did not find anyone that was pro-America

that's really puzzling, I hope you have been treated nice anyway.

would love to go to Florence

you won't be disappointed, Florence has gorgeous works of art and architecture.

[a freedom-loving italian]

I note that Warren Buffet is now bullish on the British pound

Really? That's pretty interesting, have you got any links?

I love Italy and its people. It may take a crisis to bring things back to where they should be, but I wish Italy well.

Thank you, God bless the USA and Italy!

[Betaille]

"Either through wisdom or sheer dumb luck the Brits stayed out of the Euro-Zone, and stayed out of the European Central Bank, and are prospering while continental Europe stagnates."

Very interesting observation. Do you have any idea what specifically it is about the Euro that's crushing all of these economies?

[expatpat]

Certainly, a lot of men want kids, but there's also a large number who don't. If it's 50-50, that would mean the birth rate could be cut in half.

[expatpat]

If/when you go to Florence, be sure to go up to a beautiful little village/town called Fiesole.

[MassachusettsGOP]

These nice italians on Freerepublic encourage me that Italians have not been sucked into the Euro scum crowd. Yet whenever i turn on the TV for Italian News, all I see are rioting Communists in Rome, Genoa, Milan, and Naploli. Truely disappointing along with the fact that Italy has one of the lowest birth rates on the continent, which I find astonishing considering their history of big families.

[Fred Hayek]

I remember Larry Kudlow (I think it was on the McLaughlin Group program) one time refering to the Euro as the Europeso. The EU is going to be a disaster. Micromangement of local concerns from Brussels will not work. Of course there are rear echelon types in Brussels who would like to see such an opinion be treated as a felony within the EU.

[shaggy eel]

,,, you're right - and more and more women seem to be working.

[Malesherbes]

Re Buffet and the pound. I heard it one of the financial channels, either CNBC or Bloomberg. In any case the pound remains strong against the dollar ($ 1.82 per pound) while the euro has been softening (now $ 1.25 per euro.)

[investigateworld]

Italy makes some of the finest wood working equipment in the world, I have confidence you guys will pull through.

[Malesherbes]

This is probably above my pay grade but this is what I understand. The European Central Bank has to impose a one-size-fits-all economic policy on all the countries in the Euro-Zone which fails to take into account the very significant economic differences between the countries, e.g. between Portugal and Germany. Another factor has been the ratio at which each country converted from their old currency into the euro. A Dutch economist recently asserted that their old guilder (gulden) was discounted by 10 percent when they switched to the euro and this made everything more expensive in the new currency. This charge seems to be one of the factors in current Dutch hostility toward the EU constitution.

[rawhide]

'While trying to return home from Rome, there was a work slowdown at British Airways -- the Italian airline clerk explained the problem-- He made approximately $2500 [value stated in US dollars} a month before the euro and was forced to accept the now $1250 [US dollars] salary after the euro. They were told to just eat the drop in pay. As a result the baggage checkers would routinely just stop working. For some reason the Italians don't like us any longer. '


I do not understand why they hate 'us'? What did 'we' do to cause their problem?

[a freedom-loving italian]

Yet whenever i turn on the TV for Italian News, all I see are rioting Communists...

OK, but we still have a most pro-US gov't and a truly pro-American prime minister, don't forget about that. Of course here commies are loud and make the news, but they haven't took over the government yet.

Truely disappointing along with the fact that Italy has one of the lowest birth rates on the continent, which I find astonishing considering their history of big families.

That's a way too complex issue to debate here, let's say that edonism combined with a dim view of the future are the main causes

[rmmcdaniell]

Italy is one of the few EU countries with a conservative government.

You mean like the free-spending "conservative" Bush?

[rmmcdaniell]

Clearly the problem is the nutty idea of "one-currency-fits-for-all". The Euro is unfit for Italy, we want back our Lira.

A debt greater than the GDP would cause problems under any currency.

[sheik yerbouty]

A flimsy "Tower of Babel".

[stefan10]

1. after our last discussion i visited the OECD homepage and looked up the Italians numbers.
Italy has no inflation problem and has to pay much lower interests for their dept.

2. Italy tried the devaluation policy for decades but in the long run this policy leads to additional problems.
You will loose international investments and have to pay unbelievable high rates while the benefit of the devaluation is only short.

3. The Italian economy must learn to live without the sweet poison of currency devaluation and Italy will benefit from that in the long run.

4. I would agree that the ECB must change their policy in some ways. They must add the support of economic growth to their goals as the FED in the US but the ECB was build like the German Bundesbank.

5. I always thought that the argument countries like France and Italy need a different policy than for example Ireland is the best argument against the EURO but last week the ECB published a survey that this is not the case.