Ever since the beginning of the year Euro has fluctuated a lot. It was strong against U.S dollar in beginning of the year and then fell back since late April. Moves in the exchange rate effects currency traders, equity as well as bond markets. Currency fluctuations affect company performance since it has direct impact on the level of imports and exports. The rise in anti-Euro sentiment in Italy has thus raised alarms worldwide.
Italy is the third-largest national economy in the Euro zone and one of the six founding nations of the European Union, having signed the Treaty of Rome in 1957 with France, Germany, Belgium, Netherlands and Luxembourg. However it is argued that the Euro has destroyed Italy.
Italy falling behind in currency bloc
As the Eurostat data suggests, Italy is the only country in the euro zone whose per capita output has actually fallen ever since it joined the Euro. Youth unemployment stands at 40% and its economy is 7% smaller than before 2008 financial crisis. On contrary their counterparts and main trading partner-Germany has become much more competitive. The “Italian euro” is falling far behind the “German euro”. With cheaper German imports, Italian business are exporting to Germany. In terms of what they can buy, Italians are poorer than they were in 2004, a few years after they swapped the Lira.
Dual currency talks
However exit from Euro would mean huge market turmoil. To settle the upheaval and renew competitiveness in the financial market, introduction of a parallel currency is being argued. On the other hand economists describe the idea of Euro and Lira (the dual currency) quite unworkable. Moreover quitting Euro would mean both structural and constitutional changes in the country which indeed is a very lengthy and tedious process. However with financial stability currently a uncertain possibility reforms might not happen soon as hoped. The looming spectre of issues like immigration have occupied the imagination of Europe. Businesses should not expect any changes in Italy’s currency market for some time.
As for what moods describe Europeans feelings about the Euro: Complex and Contradictory