EU Economics

Italy forced closer to EU exit door as Brussels says it must QUIT bloc to ditch the euro

ITALY has been told it cannot ditch the euro currency and revert to the lira without following Britain out of the Brussels exit door.

Jean-Claude JunckerGETTY

Brussels has told Italy it must quit the EU to ditch the euro

In a dynamite political development eurocrats made it clear to Rome that its ongoing membership of the EU is dependent on the country remaining a part of the single currency club.

Italian politicians have been making noises about ditching the deeply unpopular euro, which some economists blame for disastrous growth levels and stubbornly high unemployment.

In particular, the eurosceptic Five Star Movement, which is currently leading the polls and scored a huge result in last month’s Italian referendum, wants to scrap the single currency.But in a bombshell decision, Brussels pen-pushers confirmed that the euro is “irrevocable” under EU law and that all states with the exception of Britain and Denmark must accept it as part of their membership deal.

Five Star Movement leader Beppe GrilloGETTY

The Five Star Movement, led by ex comic Beppe Grillo, wants to revert to the lira

The European Central BankGETTY

Many Italians are unhappy at German imposed austerity via the European Central Bank

Their verdict could force Italy out of the exit door within the next few years, with the Five Star Movement pledging to hold a referendum on ditching the euro if it wins power in the country’s next election.In such a scenario, the only way to uphold a popular vote to return to the missed lira currency would be for the country to quit the Brussels bloc altogether.

The most recent opinion polls show euroscepticism is on the march in Italy, with 40 per cent of voters saying they would opt to leave the EU tomorrow if a Brexit-style referendum were held.

Brussels revealed its stance on membership of the EU being linked to the euro following a question from Green MEP Rina Ronja Kari, who asked whether the two were linked in light of the defeat of Italian premier Matteo Renzi in last month’s crunch referendum.

The substitution of the legacy currency by the euro is irrevocable

EU Commission

In its reply, the EU Commission stated: “One of the objectives of the European Union is to establish an economic and monetary union whose currency is the euro.“Apart from the United Kingdom of Great Britain and Denmark, which have a special status, all member states have legally committed to adopt the euro.

“The substitution of the legacy currency by the euro is irrevocable.”

The ruling could also have wide-ranging implications for a number of Mediterranean economies, including nearby Greece, which have been eyeing up returning to their former currencies to help haul them out of the economic doldrums.

Member states which rely heavily on agricultural exports and tourism have taken a battering due to the comparatively high value of the euro, which is worth significantly more than their own currencies would be, pushing up the cost of those goods and services.

In contrast the single currency has vastly benefitted booming Germany and its high-end manufacturing businesses by making the country’s exports artificially cheap.

That is because the value of the euro is pinned to the state of all 19 eurozone countries, with the likes of Greece, Spain and Ireland dragging down its value compared to what would be a very strong Deutschmark.

As a result, Germany’s economy has blossomed after emerging from the wreckage of the 2008 financial crisis whilst the likes of Italy, Spain and Portugal have seen almost no growth at all and spiralling unemployment.The huge inequality in wealth across Europe caused by this disparity has sparked massive tensions within the bloc, with a number of member states railing against German domination of the European Central Bank (ECB), which sets eurozone fiscal policy.

Angela Merkel has overseen a period of Berlin imposed austerity across the EU which has benefitted her own country’s economy, but has left millions of Spanish youngsters jobless and Greek pensioners starving in the streets.

The revelations come as a series of opinion polls by Spanish pollster DYM showed that support for membership of the European Union has grown in most member states following June’s Brexit vote.

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