Italy's Berlusconi says euro strangling economy

cnn.netscape.com ^

[TemplarAkolyte]

Italian Prime Minister Silvio Berlusconi has launched a savage attack on the European Union's budget rules, saying the Stability and Growth Pact had to be reformed if the eurozone wanted to see strong growth.

[TemplarAkolyte]

Weak dollar eh? Those bearish on the dollar seem to omit the fact that the euro is the currency that is out of balance.

[wideawake]

Europe's economy gets all of its growth from its export market.

And now no one can afford to buy goods from that hyperinflated region.

[eagle11]

It will take conservatives like Berlusconi to admit the liabilities of Euro-unity.

[thoughtomator]

The currency simply reflects the fact of European socialism. Socialists produce fewer goods per worker per unit of time, and thus those goods are more expensive then those from free nations.

[Cornpone]

Silvio is right. I go home to Greece with my wife almost every summer. Two years ago you couldn't find a table at the taverna by the beach where we used to go swimming every morning. Last year, you could take your pick of the best tables. No one in Greece or Italy can afford to go out anymore because the prices have become so inflated since the Euro was adopted.

[eagle11]

Do you think some will go back to their native currencies?

[Moonman62]

Yes, the Euro is out of balance. Their interest rates have been too high. But the Dollar is also out of balance. It needed to fall some, but not this much and this fast.

[pissant]

You're correct. My brother lives in Spain. Just the staples (beer, wine, smokes) have gone up 100% since the introduction of the euro. Gotta pay for the EU bureaucracy

[Cornpone]

Its a long shot but its possible. I just returned from 16 months in Italy and I spend a lot of time in Greece with my wife's family. They are all disillusioned. There is a lot of talk on the street about going back to the lira or drachma...the good old days.

[CasearianDaoist]

No it is not the Euro that is out of balance, it is the Yuan, and, to a certain extent. the dollar. The Euro is high "just because it is there." Relaxing the stability pact will not help with their current dollar problem, at least not in the short or mid term. They can either 1) support the dollar, 2) lower the euro, or 3) put pressure on the Chinese to unpeg the Yuan. Alot of this current problem has to do with the manipulation of currencies in various ways and in various markets by the US Asia amd the EU. It does not reflect - or rather, does not solely reflect - underlying economies. The Chinese are planing a game of "currency mercentilism," the Euors are playing their game and so are we. Bush in undertaking a spectacular game of "Chicken" here. We better hope he gets it right.

[maestro]

Greece wants to be a Chinese colonial/state?

/sarcasm

[Camel Joe]

Dr. Walter E. Williams couldn't have put it more plainly himself. Socialism just bites.

[ml/nj]

I never understood how the euro could work. Pre-euro, each of these countries had been printing money at whatever rate suited it, and now they have ceded the money printing power to one grand central committee. Pre-euro, the Italians almost always printed at a faster rate than the Germans and that attitude about lira has been part of financial planning in Italy at least since WWII.

ML/NJ

[Dozer3]

You'd think the europeans would have figured out by now that they'll always lag behind the US as long as they are trying to run the race with all the extra weight of welfare strapped to their backs.

Its amazing to me how many americans want us to saddle ourselves with the same programs that have done ill to the europeans.

[andy58-in-nh]

The currency simply reflects the fact of European socialism

Exactly right. In addition, a "weaker" dollar makes American goods less expensive for export. What's better: having Europeans own American debt (bonds), or having Europeans buying American-made goods? I'll take "the weak dollar" for 100, Alex...

[eagle11]

Hmmmm. I once sat next to this Belgian TV reporter on a flight, he was covering the 2000 elections. I asked him about the Euro and he told me that it was a mistake, that there has been alot of talk about the good ol' days. And he described himself as a socialist.

[schu]

I wish I understood currency/global economics better. Is it your opinion that the exchange rate between the yuan and the dollar would go up or down if it were unpegged?

If the Yuan is allowed to float, and it rises, doesn't that mean that our imports cost more and our standard of living decreases? On that basis, will the Chinese simply lower prices to maintain their market share and cost advantage like the Japanese did?

[Cornpone]

I figure everyone is going to think its a mistake now that they know Germany and France were only really in it when they thought they could run the show...now they don't like it either and I don't know if everyone else will want to keep playing the game now that they know the rules...

[Doe Eyes]

The Euro is high "just because it is there."

Lot of truth to that. I have made some investments to hedge against the dollars decline, but I can't convince myself to buy European companies or the Euro. Europe just seems stagnant.

[rogermellie]

althgough it can be said that the euro has some problems in being the 'one size fits all' currency in europe, lets not forget that it is the current italian government that recently attempted to de-criminalize false accounting within business. lets say that again, berlesconni tried to ensure that false accounting should no longer be a crime.

deep breath.

now, could this man talk you out of a burning car? no, so why trust what he says on macro-economics?

on the substantive issue, when the changeover was made some items went up, mainly due to opportunistic 'rounding-up' of the prices on the shelves, but to suggest that your weekly shopping now cost twice what it used to is laughable, incredible and just rubbish.

i know, i live in the euro-zone and i did before the euro.