Saturday, August 06, 2005

Is the Euro Cracking?

Non of the countries seems to be meeting the financial targets, and now Italy is publicly unhappy. The London Telegraph brings us 'Italy despairs of euro' - in normal times, it would be front page news

The Italians always solved their economic problems with devaluation of the currency. That's why everything price in Lira was in 10's of thousands of Lira. (or nearly everything.) Some politicos are calling for a referendum to return to the Lira.
[L]ast week the Italian Prime Minister, Silvio Berlusconi, endorsed his position, calling the euro a "disaster".
The Italian economy is in trouble. Unit labor costs are way up, especially when compared to Germany or the UK. Only 55 precent of the labor force is employed. Anyway things are generally a mess, and not likely to get better soon.

Maybe the Brits were smart to stay out of the Euro.

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