On the occasion of listening to the storytellers who, in contempt of any statistical evidence, preach the harmfulness of vaccines, I naturally associate them with the other populist storytellers who preach the exit from the Euro and the EU or only from the Euro, depending on the momentary certainty of reasoning. Populist story-telling whose economic culture is often indebted to the fake news conveyed by some social forum or to the mere reading of the few characters allowed by twitter. Not surprisingly, the political and economic culture based mainly on social forums or on twitter does not assist. In fact, some digitized sovereigns have proposed a return to the Am. lire (Allied Military Currency) in circulation in Italy after the allied landing in Sicily in 1943 which contributed, in addition to the loss of monetary sovereignty, also to the heavy inflation that hit Italy towards the end of World War II; then crushed by the monetary squeeze of Einaudi's memory.
In this context characterized by the confusion of languages and the unsuitability of ideas, I hope that on the occasion of the impending final considerations that Governor Ignazio Visco will give on May 31st, clear and definitive words will be pronounced on the impossibility of leaving the euro. It is therefore to be hoped that Governor Visco reiterates that it is impossible to leave the euro without simultaneously denouncing the Lisbon Treaty: an exit that would lead to uncontrollable economic and financial instability.
In fact, I would like to remind the populist anti-euro talkers that the Treaty of Lisbon in art. 2 paragraph 4 establishes that "The Union shall establish an economic and monetary union whose currency is the euro", the latter expression which is found in many provisions of the Treaty, constituting its glue. It therefore seems impossible to leave the euro without leaving the EU, as the anti-euro populist storytellers suggest by hypothesizing in the alternative that the countries adhering to the euro find a gentleman's agreement to leave the single currency all together: as if they were elderly ladies meeting to chat and have tea and not heads of state and government who observe with concern the latent political instability of Italy, potentially unable to support any negotiation for the common exit from the euro. They would tear us apart to divide the spoils.
Like the populist anti-vaccine storytellers, the anti-euro ones do not offer statistically significant documentation to support their proposals and analyses. I hope that in this case as well Governor Visco will offer conclusive considerations on the fatal risks that the Italian economy and household savings would encounter in the monetary context of the free floating lira against hard currencies: the euro in the first place maintained and defended by stronger economies.
Storytellers who regret the years of variable exchange rates (1973-1993) should be reminded that in those twenty years the exchange rate of the lira against the German mark went from about 150 lire for a mark to almost 1000 lire; that inflation galloped up to over 21% in 1981, bringing the rate of medium and long-term government bonds also to around 20%, loading public spending on interest payments in the years to come, which exceeded 12 per cent of GDP, helping to more than double the weight of public debt as a percentage of GDP: from 47 to 115% in 1993. It does not therefore appear a good idea to return to flexible exchange rates by abandoning the guaranteed irrevocably fixed exchange rate regime from participation in the single currency.
Instead, in the twelve years following and preceding the perfect financial storm of 2006-2007, public debt first grew to 121 per cent of GDP, before declining to 103-105 per cent of the same. For their part, inflation and rates on medium and long-term government bonds (BTPs) fell to around 2 and 3,5 per cent, respectively. In turn, public interest payments fell to about 4,5 percent of GDP.
If history is not a teacher of life, a look at the past by the anti-euro populist storytellers could enrich their meager and undocumented messages and warn them against conveying uncontrolled if not false content in a twitter or disclosed on the web.
Governor Ignazio Visco's next considerations, even though he is well aware that the anti-euro populists do not appreciate his renewal at the helm of the Bank of Italy through the transmission of their tam tam enclosed in the narrow streets of Italian politics, are therefore an opportunity important to relaunch a discussion based on facts and not on the fables of vintage populist anti-euros aimed at gathering consensus in the next political elections, at the expense of that authority that Italy has yet to conquer, on solid factual foundations and not on occasional theories in Europe.
