Thursday, June 09, 2005

Dispensing lire

Lira nostalgia apparently is stronger than anyone could have possibly imagined. A Tuscan supermarket says customers can pay for groceries in lire, reportedly doing bumper business. Uno momento, per favore. Who are these people? Who has enough lire to even afford a loaf of bread these days? Are there that many wads of the old paper stuffed under mattresses? Are gangsters returning to the country with whatever cash they couldn't launder 4 years ago? And, can the local supermarket really charge a fair market rate for a defunct currency? Not a shrewd arbitrage bet if you ask me.

Sensible Italians scoff at the notion of a return to the old currency. It was an era when the government ran up huge debts (as opposed to just very big debts today). This is an inevitable consequence of a generous social welfare scheme combined with stagnant economic growth, a burgeoning black market that triggers chronic tax evasion, and a consumer culture that makes things needlessly difficult to even pay your telephone bill or use a credit card.

But the legion of British eurosceptics are overjoyed at the turmoil in Italy, weighing in with an I-told-you-so wink and smile. The Brits, perhaps rightly, do not want to enter the euro for fear they would lose control over their economic future -- or worse, allow Europeans to determine it. (The Brits, it must be noted, don't really consider themselves Europeans, which may be why UK cuisine is so lousy.) Since the UK economy is doing fine, thank you very much, they really should stay out, goes the logic. At least for now.

But the Italians need a stable currency, even a strong one. Why? Because Italy has a weak track record of investing in its economy. It shocks me to hear so few politicians using the future tense when discussing the state of the economy. The euro is not nearly the problem. Shortsighted politicians are the problem. A return to a currency in which nobody has any confidence (except maybe a few Tuscans) would sink even the mirage that Italian politicians are committed to investing in the future of this country.

This is the topic I get most passionate about when with my Italian friends. I consider it an injustice that they couldn't even dream of the opportunities I had in New York or London. They are, in many, many, many ways, as qualified, or more so, to be the leading business figures, policy shapers and do-gooders of our time. Instead, they are losing their spirit, exhausted by an economic system that enriches fewer and fewer Italians. The latest round of lira revival chatter will hopefully lose its steam. But right now there is an entire generation of Italians who just don't have the energy to even ponder the possibility or debate the leaky logic.

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