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Italy's welfare minister wants lira back

The euro yesterday fell strongly against the US dollar after Italy's welfare minister Roberto Maroni said his country should consider temporary readoption of the lira.

The single European currency dropped to US$1.2220 in early European trading, from US$1.2309 just before dealers began reacting to Maroni's comments in the Italian newspaper La Repubblica. The euro later stood at US$1.2266.

Maroni is a member of Italy's xenophobic Northern League party, which is part of Italy's ruling coalition headed by Prime Minister Silvio Berlusconi.

Maroni told La Repubblica that the introduction of the euro had not been an adequate measure to tackle an economic slowdown and a decline in competitiveness in Italy.

It would therefore be "better" to temporarily have a dual circulation of the euro and the lira in Italy, he said.

The euro has suffered badly this week, sinking to US$1.2160 on Wednesday -- the lowest level since Sept. 20 -- in the wake of French and Dutch voters' rejection of the draft EU constitution.

Maroni, a member of the euro-skeptical Northern League party, said the euro "has proved inadequate in the face of the economic slowdown, the loss of competitiveness and the job crisis."

He also said European Central Bank President Jean-Claude Trichet was one of those chiefly responsible for the "disaster of the euro."

In this situation, the answer is to give the government greater power to defend national industry from foreign competition and "to give control over the exchange rate back to the government," he said.
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