http://www.theguardian.com/world/2014/n ... r-comeback

'Who?' was my first thought...

Sorry, for a second there I was thinking of Lyra from the dark materials trilogy.
I would have liked more books like that.

It's understandable that struggling countires want to think about leaving the Euro.
In times gone by they exchange rate would naturally drop making it cheaper for pople to go there and spend money and more expensive for locals to buy from abroad, boosting the local economy. Being within the Euro that doesn't happen. Exchange rates are for the whole Eurozone, not one country. Germany has benifited massively from this as the Deutsch Mark would have risen causing their exports to be more expensive, but the rest of the eurozone has kept the exchange rate lower meaning they can sell sell sell.
The only way the Euro could every work is if eurozone countries gave the EU all their tax money and had an EU budget deciding who got what. That would balance out the inequalites with exchange rates. Of course that will never happen.

I'm not surprised that this is a real possibility.

Italy borrowed heavily once monetary union became a reality but it didn't invest in growth. The only way for Italy to recover inside the Euro is to accept long term, painful, austerity; assuming the member states agree on fiscal union. If they don't, the Euro zone crisis will become cyclical, and I really don't see Germany et al continuing to bail out the weaker economies.

The thing is, going it alone will surely mean massive borrowing rates, so I don't know how well that fares against the alternative. Perhaps Italy sees it as the lesser of two evils?

Or the corrupt and inefficient southern states could..
Stop using fake state jobs to buy votes (inflating debts without even providing any real services).
End rigid systems of public sector pay rises that lead to bell hops at the Italian parliament earning something in the region of €200,000 /annum.
End licensing the system for cabbies in cities like Milan and Athens, where selling your minicab permit to a nephew is the standard retirement plan (hundreds of other professions are likewise needlessly closed).
And, generally, switch to a modern, competitive economy that doesn't require regular devaluations.

That was the point of them joining the Euro. Exiting for the convenience of converting their sovereign debt crisis into a monetary collapse (to be followed by a new sovereign debt crisis because their bonds aren't issued under Italian law, so they can't force lenders to re-denominate without technical default anyway) is a grand admission of failure.

It's fun to blame the Germans for predicaments elsewhere, but most of the fault is their own.

Germany has the problem that local products (mainly luxury products) are too expensive, so shopping tourism has become big here. They used to disappear over to Czech Republic or Poland, but they are becoming more expensive - I was in Hungary on business last year and it was more expensive than Germany!

Over the last couple of years the UK has been the number one destination for cheap shopping, followed by Ireland.

That said, food prices have been generally very low over here and Aldo is putting pressure on the farmers, they have sunk milk and dairy product prices by nearly 10% in the last couple of months. They are now trying to do the same for meat.

I agree with Lev on most of the rest about Italy.