Italy to introduce a competitor currency to the Euro to alleviate debts

#1
Be interesting to see what the EU make of one of its member countries introducing a competitor currency to the Euro to escape imposed fiscal restrictions. I expect the punishment will be swift and brutal.

The Italian parliament has just voted to introduce a currency to be used parallel to the Euro - the 'Mini BOT’.

An acronym for Mini Bills of Treasury, the currency is an instrument similar to an IOU that its proponents believe will allow the cash-strapped Italian government to pay debts, stimulate the Italian economy and give Italians a way to pay their taxes.

Seen largely as a riposte to EU demands for the country to rein in its massive (and growing) public debt, the decision comes in the wake of the approval of a controversial big-spending Government budget, designed to help the country spend it’s way out of it’s financial problems, without increasing it’s liability in Euros.

The government could use minibots to pay social benefits and accept them for tax payments. Private businesses would not be required to accept them, although they apparently could if they wanted to.

As the currency is only available on paper the Minibot could not be traded online or internationally.


Why is Italy talking about introducing another currency?
 
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#6
It's a test run, if it works it will replace the Euro and if that happens Italy will be the next to leave the EU


You read it here first first
 
#7
Silly question I know, but would that mean that Italian Euros become worthless in Italy? At least for in-house transactions?
I think it would depend on the buyer and seller. If the vendor still believed them to be tender, they might take them to be later exchanged/banked. As the Euro is issued by the ECB, they can still banked there. The issue with local currencies is just that: where do you bank or exchange them? Dual currencies can work, but generally in fairly local circumstances. Google “Totnes money” for an example. Money all depends on trust.
 
#8
Be interesting to see what the EU make of one of its member countries introducing a competitor currency to the Euro to escape imposed fiscal restrictions. I expect the punishment will be swift and brutal.

The Italian parliament has just voted to introduce a currency to be used parallel to the Euro - the 'Mini BOT’.

An acronym for Mini Bills of Treasury, the currency is an instrument similar to an IOU that its proponents believe will allow the cash-strapped Italian government to pay debts, stimulate the Italian economy and give Italians a way to pay their taxes.

Seen largely as a riposte to EU demands for the country to rein in its massive (and growing) public debt, the decision comes in the wake of the approval of a controversial big-spending Government budget, designed to help the country spend it’s way out of it’s financial problems, without increasing it’s liability in Euros.

The government could use minibots to pay social benefits and accept them for tax payments. Private businesses would not be required to accept them, although they apparently could if they wanted to.

As the currency is only available on paper the Minibot could not be traded online or internationally.


Why is Italy talking about introducing another currency?
So the Italian economy is going down the pan and they want to sort it out by printing more money. It may have been tried before. How many Minibots will you get to the Zimbabwe Dollar?
 
#9
I think it would depend on the buyer and seller. If the vendor still believed them to be tender, they might take them to be later exchanged/banked. As the Euro is issued by the ECB, they can still banked there. The issue with local currencies is just that: where do you bank or exchange them? Dual currencies can work, but generally in fairly local circumstances. Google “Totnes money” for an example. Money all depends on trust.
When it starts off it's seen as a barter system then it either grows or dies
 
#10
Isn’t the proposal along the same lines as a bond?
 
#11
Sounds like desperation , after they get reprimanded by Brussels they`ll demand/have an Italexit vote.
 
#13
Possibly, but having the Euro back up may help them out
I suspect that if the Euro could sort the Italian problems they wouldn't be printing Monopoly Money to pay their debts, would they.
 
#14
I think it would depend on the buyer and seller. If the vendor still believed them to be tender, they might take them to be later exchanged/banked. As the Euro is issued by the ECB, they can still banked there. The issue with local currencies is just that: where do you bank or exchange them? Dual currencies can work, but generally in fairly local circumstances. Google “Totnes money” for an example. Money all depends on trust.
That's why I asked. If suddenly Italy reissues the Lira, whilst still being a part of the Euro, would any other country accept the Italian Euro? I'd have to imagine that'd be a huge erosion of trust.
 
#15
I suspect that if the Euro could sort the Italian problems they wouldn't be printing Monopoly Money to pay their debts, would they.
Maybe it's the Euro that the problem, as they can't devalue the currency to help them out
and going to the EMF is a no no
By the way I'm no disagreeing with you just debating what's happening
 
#16
So the Italian economy is going down the pan and they want to sort it out by printing more money. It may have been tried before. How many Minibots will you get to the Zimbabwe Dollar?
If they start using the bot and not the euro, then that's not really printing money, it's just currency replacement, not a devaluation.
 
#19
That's why I asked. If suddenly Italy reissues the Lira, whilst still being a part of the Euro, would any other country accept the Italian Euro? I'd have to imagine that'd be a huge erosion of trust.
I’m not a financial expert, but I think you are right. Entering into a union (political/ financial) implies trust. If someone goes beyond, can you trust them?
Italy is not in great financial shape. They may have to take a haircut from the ECB (which for most Europeans means Germany). Greece had to do it, and be humiliated. Italy may prefer to crash out of the EU, the Euro and let the markets take care. What a gamble!
 
#20
I’m not a financial expert, but I think you are right. Entering into a union (political/ financial) implies trust. If someone goes beyond, can you trust them?
Italy is not in great financial shape. They may have to take a haircut from the ECB (which for most Europeans means Germany). Greece had to do it, and be humiliated. Italy may prefer to crash out of the EU, the Euro and let the markets take care. What a gamble!
I also wonder if Rome when they introduce their parallel currency have it pegged to say, 5 Lire/Euro? As the Lira undergoes its inevitable inflation, wouldn't that also cause the Euro to undergo the same?
 

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