Italians should consider exiting the euro amid rising public debt and no signs of economic recovery, said Beppe Grillo, a comedian-turned-politician opposed to Prime Minister Mario Monti’s austerity measures.
“Let’s face the issue, it can’t be a taboo,” Grillo, 63, said in an interview yesterday after his Internet-based political movement emerged as the third-biggest party in local elections this week. “As debt rises, spending isn’t under control, businesses close down, labor cost is up, salaries are down and we don’t even have the power of bargaining our debt.”
His 5 Star Movement, founded in October 2009, is the latest grouping to profit from rising anger in Europe over tax increases, budget cuts and joblessness amid the sovereign debt crisis. The National Front, which seeks a euro exit, won record support in the first-round of French voting last month, while the second-place party in Greek polls this week wants to tear up the nation’s European Union-led bailout agreement.
Italy’s economy, which has trailed euro-area growth for more than a decade, is in its fourth recession since the single currency was introduced and will contract 1.2 percent this year, according to the government, which is implementing 20 billion euros ($25.9 billion) in austerity measures. Costs of servicing a debt of 1.9 trillion euros will climb to 5.3 percent of gross domestic product this year from 4.9 percent in 2011, government estimates show.
The euro “is an ever-tightening noose, and there’s not even the comfort of making sacrifices to see some kind of recovery -- there’s no sign of economic recovery at all,” Grillo said in a phone interview from his home in Genoa. “This isn’t just an Italian phenomenon; think of the almost 20 percent gained by Marine Le Pen in France, or the success of both far- left and far-right parties in Greece.”
Political deadlock in Greece and Spain’s fiscal woes have helped reignite the debt crisis, as the impact of the European Central Bank’s injection of 1 trillion euros into the banking system fades. The premium investors demand to hold Italian 10- year bonds instead of German equivalents was 400 basis points at 9:00 a.m. Rome time, compared with 278 basis points on March 19.
Grillo’s movement surged in May 6-7 local elections as Italians punished former Prime Minister Silvio Berlusconi’s party and his ex-coalition ally, the Northern League. Grillo’s mayoral candidates came in second with 19.5 percent of the vote in Parma and third with 13.9 percent in Genoa. The grouping won its first ever mayoral seat in Sarego, a town of 6,600 people in the northern Veneto region, and its candidates face runoffs in three other northern municipalities on May 21-22.
While Italian newspapers including Repubblica spoke of the party’s performance as a “boom,” President Giorgio Napolitano played it down. “The only boom I remember is the economic boom of the 1960s,” Napolitano, 86, said on May 8. “I don’t see any others.”
During the election campaign, Grillo said he favored Italy staying in the EU while restructuring public debt and existing the euro “with the least possible damage.” In yesterday’s interview, he said his comments on the euro were “personal” and that his movement will debate the issue and then take an official position.
“We should ask ourselves if we can do it and what the damage would be,” he said about leaving the single currency and returning to the lira. “We would be able to depreciate our dear old lira by 40 percent to 50 percent overnight and that, while not solving our economic problems, would make more competitive” Italian exports.
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