«Out of the Euro not Europe»
Why see the negative side of the end of the single currency? Leaving the euro does not mean leaving Europe. “Everyone has a vital interest in the common European economic and social area. But it is not necessary to have the same currency. Maybe it will be the opportunity to rethink the EU, which today appears to be more of a hindrance than a help to growth,” says businessman Roberto Brazzale.»
BY ELEONORA VALLIN
«”The Maastricht euro was born in the image and likeness of the Mark and Germany won’t accept it becoming something different, we knew this from the very beginning. It’s a currency that suits Germany, its economy and its virtues. Not ours. Extending it to Italy, without assessing the feasibility of a preventive economic and social convergence, was a huge gamble. Those who understand finance had already foreseen this from the beginning, but they went unheard.
The Dutch did not want Italy in the euro, we joined by the will of Germany, within the scope of a courageous political project of reunification and, but by no means least, the desire of the Germans not to abandon Alto Adige adrift in the Mediterranean.”
Roberto Brazzale is an entrepreneur, at the helm of his family enterprise. For twelve years he has been operating in the Czech Republic producing Gran Moravia cheese. Today the group has 500 employees worldwide and an annual turnover of 170 million euros. He does not like talking about himself. “Better to talk about ideas,” he explains. So here they are, then. All of them out of the ordinary.
He explains, “For a number of years he enjoyed the so-called “euro dividend, which means we took advantage of the credit-worthiness of others. Drugged liquidity and ridiculously low prices boosted public and private debt. Then the first real international crisis came and highlighted the imbalance and the flow of liquidity to the Italian government and bank financial system froze in the wake of a profound change in the perception of risk.”
Where is it all going to end?
“In a situation very similar to that in 1933 which led to the nationalisation of companies and banks, caused by the unforeseen challenge of “Quota 90” on the GB pound by Mussolini in 1926 and the devastating deflation that followed. Well, today it is as if we had launched the challenge of “Quota 1936.27” on the ECU. Indebted in foreign currency, penalised by an overestimated exchange rate, restricted by deflationary policies, blackmailed by the financial “rentiers”, blinded by a misunderstood nationalistic pride. We even forgot about the recent disastrous dollarisation in Brazil and Argentina in the 1990s. But no one has the courage to really analyse the pros and cons of whether or not to leave the euro.”
“It seems that the country, politics, trade unions, Confindustria, are all victims of a mind-numbing spell. The euro has become a conditioned reflex and a banner of political correctness. It is assumed that it is a good thing. It’s a taboo that no one has the courage to violate to not be ridiculed. It is the apotheosis of the single conformist thought.”
“In these fifteen years, Italy has failed to “Germanise” itself, and it certainly won’t do so imposing the fiscal compact. We’re too different and the consociate block that dominates our country has proven to be able to prevent all necessary reforms. At this point, or Germany “italianises” or we will have to ask to leave the euro due to the unsustainable budgetary constraints. A hypothesis of “more Europe”, i.e. a transfer of sovereignty which equates to being annexed by Germany or, even worse, by the Brussels bureaucracy, would be radically rejected by the population the moment they realise what is going on.”
Can Germany “italianise”?
“Personally I do not think that Germany could ever “Italianise”. Merkel has so far managed to handle her electorate with ambiguous and heterodox solutions, allowing the ECB to intervene by supplying liquidity to troubled countries and to German banks with exposures towards Italy to reduce the risks. But this will not last indefinitely. And, in any case, cash will continue to be denied to households and businesses because banks fear the outburst of defaults. The electorate does not perform sophisticated analyses on convenience: the Germans think they are keeping the Italians and the Italians think they are suffering because of the Germans. I think we will see an increase in tension among the populations, on opposite sides. The first Italian vote in 2013 showed a clear anti-Euro vote, although still in the larval and pre-conscious stage. This could quickly become a conscious political position and change the scenario with unpredictable accelerations.”
A two-speed euro?
“It would make no sense. The euro could probably remain in the few countries that already had similar conditions in 1999, such as Germany, the Netherlands, Austria, Finland and a few others. Probably not even France. Other more prudent countries have already chosen to stay out despite having the prerequisites, such as the Czech Republic. The Southern euro makes no sense. The option is: euro yes or euro no. Everyone goes back to their old currency when they exit the euro. But in the medium term why is it viewed so negatively? ”
For fear of devaluation?
“The currency is an element of flexibility, a price, and as such it is necessary to the physiology of a complex organism as that of a nation with its own independent budget and its own fiscal policy. If a system is inefficient, devaluations allow it to achieve an internal balance, that is, they have a compensating function in favour of the productive part of the system, so that it can survive and create wealth rebalancing imports and exports. Devaluation has never been a gift to business, but rather a posthumous compensation, a rebalancing. Today, with a fixed exchange rate, businesses are closing and unemployment and job insecurity are soaring. We exorcise “ending up like Greece,” without bearing in mind that Greece is still in the euro.”
Does leaving the euro mean leaving the EU?
“Not at all. Everyone has a vital interest in the common European economic and social area. But it is not necessary to have the same currency, as Sarrazin states. On the contrary, perhaps it will be an opportunity to rethink the European Union, which is now more likely to represent an obstacle to social and economic development rather than an advantage. We are an increasingly less vibrant and competitive continent. Slave to self-referential bureaucracy. Jean Monnet’s design is now revealing all its dangers.”
Who did you vote for in the last election?
“That’s irrelevant. I have never had any political affiliation and I vote according to the situation of the moment. A profound crisis has erupted, a demolition, certainly not a constructive phase, that only the naive were not expecting. A dramatic phase. We must expect some difficult years ahead of us, but all crises are fertile and Italy has enormous individual and collective resources that might start to bear fruit again, as in the past. This financial and political trauma could assist the most needed reform, that of diffused culture. But nothing can be taken for granted and social conflict could escalate considerably.”
Are we facing a new phase of terror and violence?
“I do not think so. Terrorism had roots in the civil war and a strong ideological connotation. Today the problem tends to unite, not divide, and it is technical: can this Italy manage to live in the German euro? If it can’t, when and how do we get out? If it can, what profound reforms are required?
Will the population accept them? We urgently need clear answers to these issues and people capable of managing the possible dramatic phases that will ensue. The social and economic damage will be proportional to the delay with which they make their decisions, and the good or bad quality of the related initiatives.”
Being an entrepreneur outside Italy, is it better or worse?
“We are a fortunate generation that has endless opportunities in a sphere of action that coincides with the whole world. As far as food is concerned, Italians have unique qualities that they can and must build a profit on. We have extended our activities abroad without closing anything in Italy, developing sales and production in countries with ideal agricultural potential and reliable legal systems. The Czech Republic is a modern and dynamic country with a great culture, where you work and play by the rules. Today in Italy we have more employees than we did when we were not working abroad.”
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