Euro slides after Italian lawmaker talks up national currency

Italians are naturally emotional people when they talk, financial markets should just relax and put their Fat Fingers away when Italians start talking

1) I'm sure that the Germans are delighted that the Euro is cheaper. They have a fixed Low (DEM) rate within the Euro-zone and an Even cheaper Rate for Euro (suppressed DEM) to export with outside Euro-zone.

2) Italy wouldn't be in this mess if it could have adjusted it's rate over the last 20+ years. Currency markets would have done the job for them.

3) I'm sure that there are many other Euro-zone countries that privately are arriving at similar conclusions.

Having no access to the primary clearing mechanism that adjusts according to economic situation an is a vital part of having a healthy economy means that we end up with Multiple series of crises because those countries have inappropriate exchange rates forced upon them.

like all civilized nations, the EU ministers, and the Italians ultimately will come to an agreement to reach a common ground... Its all good

There's nothing good about the straight-jacket that is the Euro and the pressures that are put on ALL countries that are not part of the northern German industry supply-chain countries. The inability for exchange rates to adjust to take account of diverging economic needs will ultimately put increasing strain on the whole system. Germany might not be quite so supportive of the system when eventually they must pay the piper for all the free artificial economic advantage the single currency has afforded them at others expense.

The Italians, like the Greeks have been on a reckless spending spree for decades.

Instead of reigning in their spending the politicians make bloated promises to the voting public to get into power.

Reducing the age of retirement? Tax cuts? Any idiot looking at their budget deficit will know none of that is ever going to to be possible...not until they put their own finances in order.

Why should the rest of Europe suffer just because they want a free ride.

Lira will not make any difference, who wants buy and hold rubbish?

IF the Euro had not happened, people like Italy, Greece Spain et al would have been able to adjust their exchange rate. Additionally as soon as the Euro happened (basically underwritten by Germany) interest rates on Gvt Borrowing plummeted to close to German rates. So what they lost through access to the clearing system they regained in spades with 'easy credit'. Having 'Corseted' their economies to achieve the briefest of moments of economic convergence so the EURO's launch could proceed they we immediately able to relax the strings due to the easy money supply suddenly available.
The markets not unreasonably assumed that gvt borrowing now had an underwriter of last resort (i.e. Germany) so the risk assessment was suddenly significantly lower. Over time, with life being sucked out of their economies due to the a-symmetric nature of the Euro benefits, southern countries became more and more indebted in order to finance the purchases of northern European goods (primarily German). This was the great transfer of wealth from the south to the north (primarily Germany). Eventually you arrive where we are today...
Had they all had floating exchange rates AND CREDIT AT THE FORMER MORE EXPENSIVE RATES, then supply and demand would have dictated that DEM would have been expensive and hence their goods. So peopl,e would have bought less, the countries would have spent less and the equilibrium would not have been upset because of the imbalance the Single currency caused not least by the inappropriate entry pricing and lack of access to the clearing system that is the adjustable exchange rate.

Indeed - why should the rest of Europe suffer just because Germany wanted a free ride (through the exchange rate advantage it structurally build in?)

There is only one option to stay in Europe for Italians: stop national bonds issuance and ask Germany for eurozone issuance as it happens in USA with Treasuries. If not, Italians should ask italexit.

It's not a matter of emotional people. Borghi is simple an idiot and unfortunately in Italy like in all countries the mothers of the idiots are always pregnant.

Draghi got pretty irritated when asked about this last week - probably due to divided loyalties. This has become a generation issue, and in the end people to vote with their feet.

Much of the eur's drop today is well in accordance with the general movement after the currency completed a double top on daily on 26 Sept. Today it pushed back to a well-established support level at 1.5550 and will definitely experience resistance here.

Bring back the lira .. the market needs more currencies to dabble in

Contributors embarking on their own lengthy explanations of economic disadvantages of the currency union should realize that their shared theories and criticisms are necessarily narrowly and selectively framed.
Its also true that their theories have been aired for almost two decades during which the demise of the union has been touted endlessly and with zero effect. When it was launched, (1999) we were told it will never work. It did. When EU simultaneously exchanged domestic currencies for physical Euro notes (2002) we were told it would be a disaster. It wasnt. When we were told Greece would bring the house down? It didnt. (without EZ it would be another Argentina - try those apples folks??))..

The EZ is here to stay. Its the second most traded currency in the world. Its the currency of arguably the largest trading bloc in the world. It trades at same range against the USD as it did at launch in 1999 and over 25% (YES +25%) higher against GBP since 1999.
Its effect has been to bring Price Stability, increased economic discipline, elimination of currency risk from EZ trade, and provided low interest rates (stimulating) economic growth to a motley bunch of historically badly managed southern European economies like Italy, Spain and Greece. It restored Ireland from its catastrophic Commercial Bank induced disaster, to 5+% growth, fully recovered employment and a higher GDP P/C level than 95% of world economies.

Now.. can we all get on with trading the EUR and forget about our personal theories on its credentials?

Funny how these posts (that always end with can we get back to trading.....) never appear when the posts have been predominately pro-EU and Pro-EURO.

Also - I guess you've never heard of the Marshmallow Test then?