No CrossRef data available.
Article contents
Italy’s Readiness for the 1998 Euro in View of the Country’s Declining Competitiveness
Published online by Cambridge University Press: 01 February 2008
Abstract
In the 2006 Italian election campaign, then Prime Minister Silvio Berlusconi popularised a widely held view about the negative role of the euro for the Italian economy. This view had initially originated with the secessionist Northern Leagues. More recently, it had come to reflect the view of more moderate political players too. In the campaign Berlusconi ridiculed his contender, and the ultimate victor of the elections, Romano Prodi, for having accepted the ‘unfair Lira pegging’ to the euro in 1998. These claims reflect an ongoing debate about whether the adoption of the euro caused or even significantly contributed to Italy’s loss of economic competitiveness. We will trace the Italian trajectory and its economic preparedness for proposed entry into the EMU. We will weigh whether the terms and conditions of entry predisposed Italy to an inferior economic performance from the outset. We will assess the relative merits of the two interpretations of the role of the euro for Italy since its endorsement of the Maastricht Criteria, agreed to in December 1991. We will also look at the role played by the economic adjustments involved, followed soon after by Italy’s financial crisis in 1992. These latter events ultimately forced Italy to temporarily leave the European Monetary System (EMS). The country re-entered the EMS in 1998. We conclude that Italy’s weaknesses became more obvious with the adherence to conditions required for euro entry, but that its deep-seated political and economic problems were entrenched.
- Type
- Articles
- Information
- Copyright
- Copyright © Academia Europaea 2008
References
References and Notes
1. The EMU was the initial group of member states who joined the Euro currency on December 31, 1998, which today the European Central Bank refers to as the Eurosystem. The EMS consisted of two features – the Exchange Rate Mechanism and the European Currency Unit.Google Scholar
2. G. Pasquino (2004) Unpublished interview with B. Mascitelli on the Italian political crisis 1992–94. Bologna, Italy.Google Scholar
3. G. La Malfa (2005) Speech in London on Italy, competitiveness and the Lisbon strategy, http://www.politichecomunitarie.it/DefaultDesktop.aspx?-doc=6099, accessed 4 February 2005.Google Scholar
5. M. Battocchi (2003) Italy’s Admission to the Third Stage of the European Monetary union: A Case Study on the Diplomacy of European Integration. WWS Case Study 01/03, Princeton University.Google Scholar
6. P. Furlong (2004) Unpublished interview with B. Mascitelli on the Italian political crisis 1992–94. Cardiff, UK.Google Scholar
7.Mack Smith, D. (1997) Modern Italy: Apolitical History (University of Michigan Press).CrossRefGoogle Scholar
8. V. Spini (2004) Unpublished interview with B. Mascitelli on the Italian political crisis 1992–94. Rome, Italy.Google Scholar
9.Marshall, M. (1997) The Bank: The Birth of Europe’s Central Bank and the Rebirth of Europe’s Power (London: Random House).Google Scholar
10.Mastrolilli, P. and Molinari, M. (2005) L’Italia vista dalla CIA 1948–2004 (Roma, Italy: Editore Laterza).Google Scholar
14.EC (2005) Measuring Progress Towards a More Sustainable Europe. European Commission: The Euro: Our Currency (European Commission).Google Scholar
15.Alborghetti, G. (2005) Il libro nero del governo Berlusconi (Rome, Italy: Nutrimenti Editori).Google Scholar
16. C. Taylor (1998) Introduction: The Genesis of EMU. In: N. Barkin and A. Cox (eds) EMU Explained, The Impact of the Euro, 2nd edn (Reuters).Google Scholar
18.Weber, S. (1998) Nested institutions and the European Monetary System. In: Aggarwal, V. K. (ed.) Institutional designs for a complex world: Bargaining, Linkages and Nesting (Ithaca: Cornell University Press), p. 35.Google Scholar
20.Harper, J. (2000) Italy and the world since 1945. In: McCarthy, P. (ed.) Italy since 1945 (New York: Oxford University Press).CrossRefGoogle Scholar
21.El-Agra, A. (2004) The European Union: Economics and Policies (Harlow, UK: Pearson Education).Google Scholar
22. G. Pasquino (2004) Unpublished interview with B. Mascitelli on the Italian political situation, 1992–94. Bologna, Italy.Google Scholar
24.Arcelli, M. (1997) Storia, economia e societa’ in Italia 1947–1997 (Roma-Bari Editoi Laterza).Google Scholar
26.Bufacchi, V. and Burgess, S. (2001) Italy since 1989: Events and Interpretations (Basingstoke: Palgrave).Google Scholar
27.Harper, J. (2000) Italy and the world since 1945. In: McCarthy, P. (ed.) Italy since 1945 (New York: Oxford University Press).CrossRefGoogle Scholar
28.Padoa-Schioppa, T. (2001) Italy and Europe: a fruitful interaction, Daedulus. Journal of the American Academy of Arts and Sciences, 130(2).Google Scholar
29.Svensson, L. (1992) The foreign exchange risk premium in a target zone with a devaluation risk. Journal of International Economics, 33, 21–40.CrossRefGoogle Scholar
30.Tronzano, M. (2001) Macroeconomic fundamentals and exchange rate credibility. Further evidence on the Italian experience from a regime-switching approach. Scottish Economic Society, 48(4).Google Scholar
31. K. Dominguez (2005) The ECB, the euro and global financial markets. Paper presented at the Gerald Ford School of Public Policy, University of Michigan.Google Scholar
33.Barbacetto, G., Gomez, P. and Travaglio, M. (2002) Mani pulite – La vera storia (Roma: Riuniti).Google Scholar
36.http://www.italyflash.com/italyflash/shortt/money/money.shtml, accessed 5 April 2006.Google Scholar
37. A. Rose and L. E. O. Svensson (1993) European Exchange Rate Credibility before the Fall. NBER Working Paper no. 4495.CrossRefGoogle Scholar
40. BBC News (2005) Italy’s heavyweights set for Euro fight, 7 June 2005, http://news.bbc.co.uk/2/hi/business/4070668.stm, accessed 4 February 2006.Google Scholar