EU cracks: Italy warned it may face eurozone exit as coronavirus disaster deepens

EU cracks: Italy warned it could face eurozone exit as coronavirus crisis deepens

And Hans-Olaf Henkel recommended the very best answer can be for Italy to go away the eurozone and return to their very own foreign money, which he dubbed the “new lira”. Mr Henkel was talking in opposition to the backdrop of widening splits between the north and the south of the bloc, and notably Germany and Italy, on how greatest to mitigate the financial and societal impacts of the virus.

Manfred Weber, chief of the European Individuals’s Social gathering within the European Parliament, grew to become the most recent determine to talk out, calling for “strict controls” to stop Italy and Spain embarking on huge public spending sprees utilizing EU money.

Mr Henkel was additionally responding to feedback by billionaire europhile George Soros, who final week recommended the EU had an obligation to assist Italy, which has been hit more durable by the illness than wherever else within the bloc, by spreading the price of rebuilding the nation’s economic system amongst members of the eurozone.

The previous MEP defined: “I share Soros’ views on Italy however don’t imagine that there’s any justification to indicate ‘monetary solidarity with Italy due to the corona disaster’.

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“What have Germans to do with the selections taken by Italian politicians on their well being system or the (very late) choices on the lockdown in Lombardy?

“On common the per capita wealth of Italians is means above the wealth of as an example Germans.

“So, earlier than Italian politicians like Salvini or Conte or anyone claims cash from residents of different international locations to mitigate the monetary outcomes of their choices they need to ask their very own rich individuals to indicate solidarity with their very own individuals.

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“At the moment I advocated the euro to be cut up right into a ‘Northern Euro’ and a ‘Euro for the South’, in every case the foreign money to mirror the completely different financial realities prevailing in, for instance, Greece, Italy and France on one hand and, as an example, in Austria, The Netherlands and Germany on the opposite.”

Addressing a proposed answer – “endlessly bonds”, in different phrases, loans which might by no means must be repaid, he added: “Soros’ thought of everlasting European loans may match on a nationwide foundation like they did within the UK and within the US in World Battle 1, however they might not work on a European degree.

“Not solely would we be confronted with the identical ethical hazard equivalent to within the case of euro- or coronabonds, they might even be restricted to the eurozone therefore create a brand new border inside Europe.

“On one facet are these with solidarity for Italy like Germany.

“On the opposite are these with out like Denmark or Sweden or Poland, none of them being within the eurozone.

“The actual bombshell severely damaging the EU did already go off: Brexit!

“And right here each Soros and I engaged closely to keep away from it.

“We each appear to agree that it’s a catastrophe for each Britain and the EU.

“On the finish, it could be extra one for the EU than the UK.”

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