Newsgroup: italia.firenze.discussioni
Titolo: Il Financial Times ritorna sull'argomento

If Italy thinks the unthinkable about the eurozone
12 September 2006 Financial Times
What if a government decided to leave the European Monetary Union and 
abandon the Euro? A realistic question, and yet nobody dares to ask.
The agreements that established the euro contain no provisions to allow 
exit. However, if some government - let us suppose the Italian one - 
decided to leave, there is nothing Europe could or would do to stop it. 
But what exactly would a government set on such a course - or forced 
into it - do?
The objective would be to establish a currency - the new lira - which 
would substitute for the euro in domestic transactions but sell at a 
discount to the euro in international transactions. A bus fare of one 
euro would become a bus fare of one new lira but the external value of 
the new lira might fall to 75 euro cents in financial markets.
There are no precedents in advanced economies for such a policy. 
Currency unions have broken up before, but they have usually been de 
facto rather than legal currency unions - as between Britain and 
Ireland. Or the motives for the break-up have been political rather than 
economic. When Czechoslovakia split apart the aim was to preserve, 
rather than to alter, the terms of exchange between the two new states.
The laws that brought the euro into being said that contracts made in 
lire were to be interpreted as contracts made in euros at a prescribed 
conversion rate. But you cannot simply pass a law that contracts made in 
euros can in future be discharged in new lire. The plan would have to 
distinguish Italian contracts from others. But how? The Italian state 
would pay employees and pensioners in new lira. It might impose a 
temporary freeze on domestic prices and wages, whose lira amount could 
not exceed their old euro values. This is the familiar apparatus of 
crisis devaluation. But what of financial and commercial contracts made 
in euros before A-day but not yet completed?
The simple answer is that an agreement in euros stays in euros. But this 
is not politically feasible. Italians would not accept that their 
mortgages and credit-card debts, denominated in euros, would cost them 
one-third more to repay: and it would be absurd if the bank deposits of 
Italian residents were revalued by a similar amount.
The relevant principle of international law seems to be that debts are 
denominated in the currency of the place where they are to be paid. But 
in the modern world, that question often has no clear answer. The 
residence of parties to the contract also matters. This seems to give 
generally sensible answers when both are Italian, but in many cases one 
party is Italian and the other is not. What of multinational companies? 
Then there is an issue of legal jurisdiction. For example, many 
financial contracts are made under English law even if the transaction 
has nothing to do with England. An English court would want to uphold a 
valid Italian law, but it cannot be assumed it could or would, 
especially if that law seemed to favour Italians at the expense of other 
nationalities.
Businesses with activities in both Italy and other countries would find 
that some assets and liabilities had been converted to new lira while 
others remained in euros, and there would be large mismatches between 
the two. The likely losers would be multinational companies with Italian 
assets and dollar balance sheets: the likely gainers might be Italian 
retail financial institutions, which collect deposits in Italy and place 
them in other countries. The outcome would be a period of chaos in 
markets and a decade of work for lawyers.
Some people will conclude that these problems make a break-up of the 
euro impossible. This would be a profound error. History - not least the 
establishment of European monetary union itself - shows that, given 
political determination, practical problems will be overcome. Civil 
servants, lawyers and bankers are there to ensure that a client's wishes 
are met even if misconceived and if the Bank of Italy does not have a 
plan in its safe, its officers have been failing in their plain duty.
Any international bank or business should contemplate these issues. But 
the consequences of such contemplation are grave: in financial markets, 
actions to protect against a contingency make that contingency more 
likely. That is why a debate on the fragmentation of the eurozone is a 
debate that no one dares have.

 abandon the Euro? A realistic question, and yet nobody dares to ask.
Carini i WHAT IF.
La Marvel aveva una serie molto divertente che si chiamava proprio cosě.
-- 
Christian
- socio MSTC - responsabile controllo qualita' cazzate

La Marvel aveva una serie molto divertente che si chiamava proprio cosě.
Mha, a parte qualcuno fatto davvero bene, non č che fossero poi un
granchč...
-- 
Jester
http://www.gilibo.net

 granchč...
ah neanche loro eh?
:-D


:-D
Scusa Christian, sono stanco e c'ho un sacco di problemi
pre-matrimoniali, ma non ho capito...
Mi fai un disegnino, please?
:-)
-- 
Jester
http://www.gilibo.net

 :-)
ROTFL
era una battuta sull'articolo.
:-D
niente di che.


 debate that no one dares have.
Evidentemente l'articolista ha esagerato con le happy hours..


temo che prima o poi la questione tornerà nell'agenda dei politici 
italiani. forse sarà la Lega, forse sarà l'estrema sinistra, ma a quel 
punto, se accadrà, sarà in virtù di:
1. un'economia che non va bene e,
2. di riforme che non sono state fatte, o fatte a metà.
il punto 1 è una quasi certezza, il punto 2 è molto probabile, specie 
alla luce dei tentativi mezzi falliti di Bersani di liberalizzare 
l'economia.
se poi oltre all'Italia la questione dovesse apparire in un altro paese 
(Spagna? Francia? Portogallo? Finlandia?), l'Italia seguirebbe a ruota...