Italy’s Northern League pledges to put right ‘error’ of euro

Reuters — Italy’s rightist Northern League brushed off on Wednesday suggestions it had dropped its opposition to the euro and renewed its pledge to rectify the “error” of the single currency.

Rising hostility to the euro in Italy is a prominent issue in campaigning for a 4 March national election, and the prospect that anti-establishment parties could try to pull the country out of the single currency has rattled financial markets.

A coalition including the League and former premier Silvio Berlusconi’s Forza Italia (Go Italy!) looks set to win the most votes in March, but no group is likely to achieve a clear parliamentary majority.

European Parliament President Antonio Tajani, a member of Forza Italia, said this week the League “seemed to have abandoned the idea of a hypothetical and unfeasible exit from the euro”. League leader Matteo Salvini hit back on Wednesday.

“Free interpretations of my thinking make me laugh,” he told la Repubblica newspaper. “I remain convinced … that the euro under these conditions was an error. Which we will put right.”

Allied with France’s National Front in the European Parliament, the League blames the euro for rising poverty in the bloc, saying it only favours economic powerhouse Germany.

Once one of the most pro-EU nations in Europe, Italy has become more hostile towards Brussels in recent years. A survey released by the Bertelsmann Foundation last October showed 83 percent of Italians were not satisfied with the direction of the EU against an average of 66 percent across the 28-nation bloc.

The anti-system 5-Star Movement has also seized on this disaffection, pledging a referendum on euro membership if Brussels does not agree to change the bloc’s fiscal rules that  limit public spending.

Claudio Borghi Aquilini, the League’s head of economic told Reuters that “Our plan is still to try to leave the euro as soon as possible, but ‘as soon as possible’ means being ready to do so,” he said, giving no indication of how long it would take.

One of the League’s flagship proposals is to introduce a parallel currency for domestic use, issuing small-denomination bonds to firms and individuals owed money by the state.

Borghi said such instruments could become a sovereign currency in an emergency.

Berlusconi, who cannot run personally in the election because of a tax fraud conviction, also proposes a dual currency, but does not back abandoning the euro.

Building consensus in a center-right coalition for a radical exit will be difficult, Borghi said, partly because Italy’s economy is now growing modestly. But any future intransigence from European authorities could help that cause, he added.

“If we start with the idea that we always have to say ‘yes’ to whatever they ask of us, because we must stay in the euro at all costs, it’s over, it’s worse than a military defeat,” he said.

The parties contesting the election:

Ruling Democratic Party, leader Matteo Renzi (42)

Policies: negotiate with Italy’s partners to abolish the EU’s Fiscal Compact which imposes steep budget cuts on high-debt countries such as Italy. Raise the budget deficit to 3 percent of gross domestic product for five years in order to cut taxes and increase investment. Continuity in social and foreign policy, with Italy maintaining its traditional pro-NATO stance.

Support sliding in opinion polls, now at around 23 percent.

5-Star Movement, leader Luigi Di Maio (31)

 Policies: universal income support to ensure monthly income of at least 780 euros; renegotiate the Fiscal Compact; raise the budget deficit above 3 percent of GDP to cut taxes and increase investments; hold a referendum on euro membership if partners refuse any concessions on the Fiscal Compact;
cut privileges of politicians, trade unions and well-off pensioners; repeal 2011 pension reform to allow earlier retirement; repeal 2014 labour reform to make firing harder; raise taxes on banks and oil and gas companies; toughen conflict of interest rules; cut red tape, abolishing 400 laws; scrap public financing of newspapers; separate banks’ retail and investment arms; improve relations with Russia.

Italy’s most popular party, according to polls. Support stable at around 28 percent.

Forza Italia, leader Silvio Berlusconi (81).

Policies: Introduce parallel currency for domestic use to boost the economy while keeping the euro for international trade and use by tourists; replace current staggered income tax rates with a single rate “flat tax” of around 23 percent for both individuals and companies; double monthly minimum pensions to 1,000 euros; abolish housing tax, inheritance tax and road tax on most cars; tax breaks for pet owners; guarantee minimum income of 1,000 euros per month for everyone; block the arrival of immigrants through accords with North African countries. Berlusconi is pro-NATO but boasts of his friendship with Russia’s Vladimir Putin. Berlusconi cannot run at the election due to a tax fraud conviction. He has not yet said who Forza Italia’s candidate for prime minister will be.

Support rising, around 16 percent, making it the most popular party in a center-right coalition expected to win most seats at the election.

Northern League, leader Matteo Salvini (44).

Policies: Parallel currency for domestic use; push for abolition of the Fiscal Compact and Stability Pact; leave the euro as soon as it is politically feasible; “flat tax” for individuals and companies at 15 percent; repeal 2011 pension reform to allow earlier retirement; immigration crackdown by intercepting and sending back migrant boats and repatriating up to 100,000 illegal immigrants per year; toughen penalties for violent crime; improve relations with Russia.

Support slipping, around 13 percent.

Brothers of Italy, leader Giorgia Meloni (40).

Policies: Immigration crackdown by intercepting and sending back migrant boats and repatriating illegal immigrants; toughen penalties for violent crime; improve relations with Russia. Policies generally close to the Northern League’s but unlike the League, its support is based in central and southern Italy.

Support stable at around 5 percent.

Free and Equal, leader Piero Grasso (72)

Left-wing party formed this month to unite small movements which had left the PD in dissent with Renzi, who they said had moved it too far to the right.

Policies: Repeal 2014 labour reform to make firing harder; soften 2011 pension reform to end automatic increases in the retirement age on the basis of rising life expectancy, increase spending on education, health and public works; improve relations with Russia and fully recognize state of Palestine.

Support rising gradually, around 7 percent.