A parallel currency?

The Economic Adviser to the Lega party, the larger of the two governing coalition partners in  Italy, has come up with a scheme for mini BOTs or low denomination Treasury Bills. The Italian Parliament recently passed a motion in favour, though this is not binding and the Treasury is not yet printing and issuing  these bonds.

The Italian state like others issues Treasury Bills to institutional investors. These are usually short term loans to help finance public spending. They can be traded against their electronic certificates.

This  new scheme is to issue so called Treasury Bills or  bonds with no repayment date and no rate of interest payable.  They would be issued with physical certificates or notes in 10,20, 50 etc Euro denominations. Individuals could pay tax bills with them, or buy any goods or services from the state like petrol from a state owned filling station.

The European Central Bank has been asked about this. They have said if this is a parallel currency it is under the rules of the Euro scheme illegal. If these are debt instruments they have to be under the overall budget deficit and borrowing controls that apply in a single currency.

The mini BOTs look much like banknotes and would give the Italian state the effective right to print a money substitute to get round some of the controls on their economy from the Euro scheme. It is a provocative idea. So far they have put the idea into circulation but not the notes. If they did start to issue them it would be a major challenge to the Euro.

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  1. formula57
    Posted June 16, 2019 at 5:18 am | Permalink

    The mini-BOT scheme is a concept of genius, enabling Italy should it ever wish to abandon the Euro currency having readily to hand a functioning replacement currency. Not for the Italians the derailing cry of “but what currency would you use?” that did for the SNP’s separatist antics (tragically).

    All praise to the Lega Nord that unlike Greece’s Syriza does not wish its country to live on its knees subservient to the ambitions of evil Eurocrats.

    • Lifelogic
      Posted June 16, 2019 at 6:28 am | Permalink

      Alas most of the UK establishment, bureaucrats, the legal establishment, academia, the BBC, May, Hammond, Cameron, Osborne, Major, Brown, Blair, the Conservative party, the Libdims, Labour, SNP, Plaid …. want the UK to live on its knees subservient to the ambitions of evil Eurocrats too.

    • acorn
      Posted June 16, 2019 at 8:46 am | Permalink

      There is only one thing worse than neoliberal governments practicing fiscal austerity within its own currency and that is doing it with someone else’s currency.

      Remember that the prime directive of neoliberal economics is to direct as much public money as possible into private sector corporations. They then redistribute it, less large fees and charges, to the rest of us via interest, dividends and cost minimised services.

      Prof Mitchell hates the EU and particularly the dysfunctional Euro currency system, more than JR does. he has a short post titled “Eurozone fiscal rules bias nations to stagnation – exit is the remedy”. Includes Italy leaving the Euro.

      For countries which run external deficits like the UK, the fiscal deficit has to offset the drain in domestic spending from the external sector (net imports); and, the overall private domestic / household saving. Otherwise, you get recession and stagnation.

      A sovereign country’s taxation gets paid in its sovereign currency, that is what makes its currency valuable. Citizens have to get some to pay their taxes else they would use other stuff as currency.

      Remember that 19 Eurozone governments have to borrow Euro by issuing bonds at market interest rates, they are not currency issuers, the ECB is the Euro currency issuer. They are treated like corporate bonds. The ECB like the UK Treasury never need to borrow their own currency from anyone and they will never run out of their respective currencies.

      • Edward2
        Posted June 16, 2019 at 10:47 am | Permalink

        You can run out of your own currency.
        Economic history has many examples of a currency becoming worthless Currency markets abandon it and the people in these magic money tree nations use another currency or revert to bartering.
        Perpetually printing money to create wealth is like drinking sea water to quench your thirst.

        • Mitchel
          Posted June 17, 2019 at 9:36 am | Permalink

          The Soviet Union and both the Weimar Republic and it’s Nazi successor traded with each other on a barter basis during the interwar period.

      • Narrow Shoulders
        Posted June 16, 2019 at 1:31 pm | Permalink

        Interesting article

        I particularly liked In the Eurozone, the governments do have to borrow in order to run deficits because they unwisely opted to use a foreign currency, the euro.

      • libertarian
        Posted June 16, 2019 at 4:38 pm | Permalink


        That is the biggest pile of economic drivel Ive ever heard


        Tin Foil Hat territory

        • Peter Martin
          Posted June 18, 2019 at 10:07 am | Permalink

          @ Libertarian,

          Formula57 describes the MiniBot scheme as a “concept of genius”. You describe it as a “pile of economic drivel”. It’s neither. It’s actually a German invention!

          In the prewar period the Weimar and Nazi governments used the same method of a parallel currency to circumvent military spending constraints imposed under the Versailles Treaty. Google “Mefo bills” for more info.

    • Pominoz
      Posted June 16, 2019 at 10:01 am | Permalink

      Perhaps the first tangible signs of the EU implosion. We need to be well clear when it occurs.

      • hans christian ivers
        Posted June 16, 2019 at 12:07 pm | Permalink


        We will all suffer deeply if there is an implosion but this is not the first plausible sign

  2. Richard1
    Posted June 16, 2019 at 5:29 am | Permalink

    We better hope Italy does not crash out of the euro. Losses to the banking system would surely run into the €10bns, maybe €100bns. The resulting contraction of credit would then mean recession Europe wide at least. The eurozone really needs to integrate politically and fiscally as set out by Président Macron in order to stabilize the outlook.

    Being in a currency union with a country with stagnant growth and 130% debt to gdp is a major liability. It is odd that some pro-EU economists eg in publications like the FT, dont pick this up more.

    • mancunius
      Posted June 18, 2019 at 2:14 pm | Permalink

      Germany is key, but alas, the Germans believe their government’s assurances that they are economically invincible, and need not change a thing. They have effectively nationalised profit and off-shored loss, while basking in the illusion of ‘Europe’.
      They will never agree to any fiscally re-distributive policies.

  3. Lifelogic
    Posted June 16, 2019 at 5:32 am | Permalink

    An interesting prospect at least Italy are cutting taxes and not still increasing them as in UK. Italy is probably now even more EU skeptic than the UK. My wife is Italian the country it is in a total mess. Perfectly pleasant properties even in nice parts of Nothern Italy can be bought for well under 50,000 euros, the banks are mainly insolvent. Italy’s youth unemployment rate has recently climbed above Spain’s (for the first time in more than a decade) 33% in January 19.

    What a massive waste of talent – not working and in the main not even learning how to work. But then they do have quite a large black economy I suppose.

    • formula57
      Posted June 16, 2019 at 9:56 am | Permalink

      @ Lifelogic “My wife is Italian the country it is in a total mess.”

      I and I am confident many others will recoil from any suggestion (implied by the juxtaposition) that Mrs. Lifelogic is at all responsible for the total mess.

      • Andy
        Posted June 16, 2019 at 11:10 am | Permalink

        Don’t worry. Lifelogic is already living to regret his poor typing skills.

      • hefner
        Posted June 16, 2019 at 1:10 pm | Permalink

        By now everyone here is used to LL’s idiosyncratic style.

    • Fred H
      Posted June 16, 2019 at 10:15 am | Permalink

      all part of the wonderful EU.

      • L Jones
        Posted June 16, 2019 at 8:06 pm | Permalink

        No doubt the Andys, Ms Howards, etc, here will tell us why such a high level of youth unemployment is acceptable in their much-revered EU.

    • agricola
      Posted June 16, 2019 at 10:25 am | Permalink

      As you and your wife must know, Italy cutting taxes is irrelevant for many individuals because they avoid paying them, high or low. If you mean investment taxes , corporation, business, social security contributions then that might encourage foreign investment. Balancing the latter they won’t get much encouragement from the EU. Once out, these are areas the UK needs to look at, as you have often said with my silent support.

      • agricola
        Posted June 17, 2019 at 6:52 am | Permalink

        Long overdue for moderation.

    • Monza 71
      Posted June 16, 2019 at 2:12 pm | Permalink

      I have a Euro account in France but for some time I’ve been thinking of opening another in Germany , if I can find a sound bank in that country, which won’t be easy !

      I’ll then wait for Italy to crash out of the Euro, when I’ll dive in and use my greatly appreciated German Euros to buy up a nice villa at Lake Lugano for a pittance.

  4. Mark B
    Posted June 16, 2019 at 5:33 am | Permalink

    Good morning.

    I seem to remember that when the EURO was first being mooted it was suggested that it too should be issued as a parallel currency. The Europhiles and the then EEC firmly slapped this down as they saw it as a further hurdled to the dream of a Federal superstate.

    Nobody seems to be addressing the Elephant in the room. And that is the EURO is not a finished project. For it to be completed there has to be FULL policial, economic and financial unification between all members that use the EURO and to a lesser extent those that use it but are not members of the EU. And as Germany will not be lender of last resort and allow financial transfers, I fail to see an end to the problems that the EURO brings.

    The Italians and others are in a Gordian knot and the only way out it to Leave the EU, but they can’t as the people do not want to. This is an impossible situation that will in the end lead to ruin. I truly despair for them.

    • Andy
      Posted June 16, 2019 at 11:14 am | Permalink

      You’re right. People like Wynne Godley and Bernard Connolly (our host was another) pointed out the flaws right from the beginning, but no one would listen. Everything they said would happen has and more aside. The Continental country I know best is Greece and there the effects of the Euro have been horrendous. The EU establishment are now congratulating themselves that Greece is growing again at about 2% having lost a third of her economy.

      • margaret howard
        Posted June 17, 2019 at 11:09 am | Permalink


        ” The Continental country I know best is Greece and there the effects of the Euro have been horrendous”

        Really? Maybe that is the reason:

        An extract from the World Bank on Global Economy:

        In the “Doing Business” category Greece came 61st, just behind Tunisia

        For “Reliability” it came 155th, just behind Malawi

        For “Tax Collecting” it was behind the Solomon Islands

        But in other criteria it compared favourably to Tongo and Morocco

        • mancunius
          Posted June 18, 2019 at 2:23 pm | Permalink

          You seem obsessed with ‘Tongo’, Margaret. It comes into every other post of yours as an example of poor governance.
          Would you care to enlighten us as to where this mythical country is located? Or have you innocently confused it with the fictional card game in ‘Star Trek’?

    • Denis Cooper
      Posted June 16, 2019 at 11:49 am | Permalink

      You are correct in your remembrance and in everything else you say.

    • Richard1
      Posted June 16, 2019 at 2:13 pm | Permalink

      This was the hard ECU plan supported, inter alia, by Margaret thatcher. It would have been a much better idea. It would have provided all the commercial and capital markets advantages of the euro, been a good measure for fiscal discipline for govts, but not necessitated any of the surrender of economic sovereignty required by a single currency. Which of course was why the EU nomenclature were so opposed to it.

    • GilesB
      Posted June 17, 2019 at 9:27 am | Permalink

      In particular there has to be a uniform tax system. That in turn means that social welfare policies, education, health, and hosing policies all need to be essentially uniform too.

      Target 2 balances are over a trillion euro.

      And Italy is too big to fail, and too big to save.

      See Italeave: Mother of all financial crises on the Moneyandbanking website

  5. Ian wragg
    Posted June 16, 2019 at 5:39 am | Permalink

    Bring it on. Anything that speeds up the demise of the EU is welcome.
    Maybe Westminster could learn a thing or two from Italy.

  6. agricola
    Posted June 16, 2019 at 5:47 am | Permalink

    Why not be honest, leave the Euro and revert to the Lira. The Italian government could then take their traditional route of devaluation. The bond proposal seems to me to be a casino solution. They might be more at home with Bitcoin.

    • agricola
      Posted June 16, 2019 at 5:55 am | Permalink

      As tbese Bonds devalue in terms of buying and selling them can you still pay your tax bill and buy your petrol with them at their nominal printed value in Euros. If so they won’t be popular in government and commercial circles.

    • NickC
      Posted June 16, 2019 at 3:37 pm | Permalink

      Agricola, The reason Italy does not leave the Euro and use a (new) Lira is that ordinary Italians do not want their savings halved over night. If all EZ states reverted to their own currency, Germany’s would rise and the Italian Lira would plummet. The Euro shows the depths of evil design that the EU has in entangling states in a scheme so complex that none can leave.

    • Mitchel
      Posted June 16, 2019 at 4:09 pm | Permalink

      Also Italy’s per capita gold reserve is amongst the highest in the world.

      • Margaret
        Posted June 16, 2019 at 8:34 pm | Permalink

        Is that partly down to Vatican City.

        • agricola
          Posted June 17, 2019 at 6:50 am | Permalink

          Ask ” The Italian Job” entrepreneurs where they keep it and make yet another hit film about it’s removal. This time with a successful happy ending.

  7. Mike Stallard
    Posted June 16, 2019 at 5:50 am | Permalink

    I am sure that the Greek and Spanish governments will be watching this development with great interest.

    • mancunius
      Posted June 16, 2019 at 11:31 am | Permalink

      One is reminded of the plans some members of the Syriza government developed to raid the euro printing press in Athens, and Varoufakis’s idea of issuing e-money and e-debt on tax accounts.
      What followed instead was Tsipras’s capitulation to the EU/IMF.

  8. Lifelogic
    Posted June 16, 2019 at 6:04 am | Permalink

    So Corbyn is planning to tax people if they give more than a lifetime allowance of £125,000 away to children! We are still waiting from our (economically challenged, tax to death socialist Chancellor and PPE graduate) the increased IHT allowances as promises by Osborne (& Hammond) many years ago to £1 Million each! It still remains at 40% over £325K this despite his desperate and idiotic fudge attempt, (In Italy it is just 4% of the amount exceeding €1 million for each heir child or spouse), in the USA the threshold is circa $10 million each. Sensible countries have no death or capital taxes as people spend & invest their money so much better than governments do in the main. And certainly ones with people like May, Hammond, Corbyn and Mc Donnall types in charge.

    So you can spend your money on prostitutes, Ferraris, alcohol, private yachts, expensive holidays, various mistresses, eating at top Michelin restaurants, flying round the world first class. …….. but in a Corbyn/Mc Donnall world (and probably even a socialist Gove, Rory Stewart, Jeremy Hunt, Mathew Hancock …. one) not on helping your children to buy a home, their university fees, training them to become a doctor, on private school education or even for urgent private medical care needed no doubt!

    Why bother to earn it if, after paying nearly 50% tax & NI on it the remaining part is not even yours anyway to spend as you choose? Why do the British put up with being taxed to death and served generally appalling public services too. BBC brain washing perhaps?

    Heffer, Ridley, Hannan and Welsh all sound as usual in the Telegraph’s comment section today.

    • Andy
      Posted June 16, 2019 at 2:12 pm | Permalink

      If you are poor you do not have any money to spend on prostitutes, Ferraris, alcohol, private yachts, expensive holidays, various mistresses, eating at top Michelin restaurants, flying round the world first class etc.

      You have those things if you are very rich. And if you are very rich you should pay more to help those who are not. In any case although you complain a lot about tax you are clearly not serious about wanting to lower it because you support outlandish state spending on old people.

      Axe the state pension, pension perks, make old people pay for their own social care and change them an extra NHS fee – as they use most of it anyway – and then we can all have a massive tax cut. Easy.

      • NickC
        Posted June 17, 2019 at 8:46 am | Permalink

        Andy said: “if you are very rich you should pay more to help those who are not” and “Axe the state pension, pension perks, make old people pay“.

        It is a wonder you don’t implode as a result of your (many) self-contradictions.

      • Fed up with the bull
        Posted June 17, 2019 at 9:22 am | Permalink

        Andy, having a go at the old again? What about the young? Unmarried mothers who have their rents paid and benefits paid, feckless fathers who couldn’t give a damn that we have to raise their children, young people getting drunk and getting liver damage taking up NHS beds and obese young people putting a strain on the NHS. It’s not just the elderly and we older people have paid our dues for years. When the young get old, and that includes yourself, you will in turn be looked after. You really are an air head at times. Correction, most of the time.

    • Richard1
      Posted June 16, 2019 at 2:15 pm | Permalink

      It is a very stupid idea and will hopefully be very unpopular once people realise it’s intrusiveness and disincentive to success.

    • Nigel E
      Posted June 16, 2019 at 3:34 pm | Permalink

      I think the promise was £1 million per (married/civil partnership) couple.

      But I take your point.

      • Lifelogic
        Posted June 17, 2019 at 12:35 am | Permalink

        Osborne told his party’s conference in Blackpool 2007: “The next Conservative government will raise the inheritance tax threshold to £1 million. That means we will take the family home out of inheritance tax.”

        The threshold was/is still per person not per couple! And even a £2 million (per couple) threshold would not take many family homes out of IHT. Even a three bed terraced house in London can cost more than that.

        • NickC
          Posted June 17, 2019 at 8:55 am | Permalink

          LL, Then there’s Corbyn who is proposing a “lifetime” gift tax limit of £125,000. Yet the Telegraph and Grauniad indicate the cost of merely bringing up one child is c£230,000.

          That means children like Andy owe their parents around £100,000, otherwise the parents will be taxed by Corbyn for the privilege. So pensioners by rights should become an awful lot richer in Andy’s vision of the Corbyn future of the UK.

    • Mike Wilson
      Posted June 16, 2019 at 11:55 pm | Permalink

      Whilst not seeking to argue that tax is high – if you add income tax, national insurance, council tax, VAT, duties on fuel etc. it adds up to a lot of tax – why du you assert taxes are the highest for a long time given the large, recent increases in the personal allowance?

      • libertarian
        Posted June 17, 2019 at 9:38 am | Permalink

        Mike Wilson

        Well because the people who actually pay the bulk of income taxes actually dont get a personal allowance at all

      • hefner
        Posted June 17, 2019 at 12:58 pm | Permalink

        It depends where you look: within the Circle Line that’s certainly true, towards the end of most Tube lines, there are 3-bedroom detached houses for less (sometimes much lower) than £1.5m. Someone in my family is looking for such “jewels” and during the last few weeks they have visited about 10 properties.

  9. Fed up with the bull
    Posted June 16, 2019 at 6:10 am | Permalink

    I’m not the best on financial matters but if this causes problems for the euro then I’m glad we’re not a part of it and wouldn’t want to have to use the euro in the UK. I think problems are brewing up in the EU. The sooner we are out, the better. We will not escape any crashes completely but at least we have our own currency and can make our own decisions once we are out..

  10. Bryan Harris
    Posted June 16, 2019 at 6:19 am | Permalink

    The EU elite, of course, could not tolerate such insubordination – They will put pressure on Italy against using this as an alternative currency. AS we all know the EU cannot tolerate free thinking or ideas that come from others – They have to be in control at all times, and of all things.
    I hope that Italy can find a way to make this work to their benefit to help them escape the over-tight constraints the EU imposes.
    Italy still yearns for the Lira – perhaps one day they will get that back.

    • L Jones
      Posted June 16, 2019 at 8:10 pm | Permalink

      ”Elite”? Whatever continues to persuade you still that they are ”elite”?

      ”Elite” = a select group that is superior in terms of ability or qualities to the rest of a group….”

      Oh, yeah?

      • Bryan Harris
        Posted June 17, 2019 at 6:30 am | Permalink

        I agree they don’t live up to that definition – It’s an accepted term for the small army that runs the EU from the top down….

        Perhaps we should consider another term:


        Suggestions welcome

        • mancunius
          Posted June 18, 2019 at 2:27 pm | Permalink

          The ‘Eulite’?

  11. Dominic
    Posted June 16, 2019 at 6:28 am | Permalink

    I doubt it’s a serious challenge more a warning shot to the fiscal domination of Euro and the EU. It signals intent and mood more than formal policy

    If Lega want to change the sovereign status of Italy they need to appeal to the citizens of Italy and hold a national referendum. Anything else is purely cosmetic

    As an aside I see RGS is once again being used to slander and tarnish Eurosceptic heavyweights. From Farage to Johnson. They tick all the boxes that trigger Europhile, liberal left progressives into a psychotic frenzy. It’s delicious to watch their infantile squealing.

  12. Alan Jutson
    Posted June 16, 2019 at 6:40 am | Permalink

    I cannot possibly see how the EU would agree to this at all, as it is a threat to their Financial control within the Euro Zone as well as their authority.

    Looks like Italy are getting desperate for money.
    Perhaps they would do a little better if they were to encourage more tourists from outside of Italy who would bring in some much needed cash with them.
    Oh hold on a minute, the EU are suggesting they may make it more difficult to the UK traveller when we leave !

  13. GilesB
    Posted June 16, 2019 at 6:44 am | Permalink

    Following the common law principle that ‘Everything is permitted, unless it is explicitly prohibited’, innovation is allowed and the regulators have to adapt quickly to new developments.

    But under the Napoleonic concept that ‘Nothing is permitted, unless it is explicitly authorised’, innovation is stifled as the regulators respond slowly to observations of developments in other regimes. Of course, the globalists of the left would really like the authoritarian concept ‘Everything is either mandatory or prohibited’.

    One would think that the Eurozone rules, like the EU’s other pillars, embed the Napoleonic concept.

    However the ECB has been so slow to address Bitcoin, it’s not at all clear that they will be able to prevent mini-BOT until they are de facto a parallel currency

    • acorn
      Posted June 16, 2019 at 5:04 pm | Permalink

      There is no final redeemer of Bitcoin, you can’t use it to pay your taxes in any sovereign fiat currency area.

      I suggest you read up on Tulip mania. A period in the Dutch Golden Age during which contract prices for some bulbs of the recently introduced and fashionable Tulips, reached extraordinarily high levels and then dramatically collapsed in February 1637.

      Bitcoin is exactly the same, a purely speculative synthetic commodity that has no sovereign tax credit value.

      • Al
        Posted June 16, 2019 at 8:26 pm | Permalink

        “There is no final redeemer of Bitcoin, you can’t use it to pay your taxes in any sovereign fiat currency area.”

        Gold and Cigarettes can’t be used to pay taxes directly either, but it hasn’t stopped them being used as a currency in many situations. However like gold, Bitcoin is usually handled as a commodity and traded on regulated exchanges (unless you are in the UK, where the banks are known to object).

        While cryptocurrency has no government backing, as Venezula and certain other countries show, it is useful to keep trade moving when the government-backed currencies collapse.

        • GilesB
          Posted June 17, 2019 at 9:44 am | Permalink

          You can use Bitcoin to pay your taxes in Zug

        • Mitchel
          Posted June 17, 2019 at 9:50 am | Permalink

          Or when sanctions are in place.We now know the Venezuelan Petro was devised by the Russians and they and other non-G7 states conduct trade with each other outside the American controlled system which will in due course break down because of it’s weaponisation.

      • libertarian
        Posted June 17, 2019 at 9:43 am | Permalink



        The US state of Ohio accepts bitcoin for payment of taxes

        • acorn
          Posted June 18, 2019 at 3:10 pm | Permalink

          No it doesn’t.

          Ohio state won’t actually collect bitcoin. Instead, taxpayers will send their digital currency to BitPay, a payments processor in Atlanta, which will convert the bitcoin into US dollars for the state treasurer’s office.
          “At no point will the Ohio Treasurer’s office hold cryptocurrency.”

  14. J Bush
    Posted June 16, 2019 at 7:20 am | Permalink

    The problem with the ‘one size fits all’ euro is that doesn’t operate equally. It is very under valued for Germany, hence their ‘economic success’. For many of the southern European countries it is very over valued, limiting their abilities and aiding their demise. For a long time Merkel crowed over these countries boasting how efficient Germany was! Prior to the euro, Germany wasn’t a ‘powerhouse’. Her crowing didn’t convince and annoyed those who understood what was happening and were on the receiving end of this unfairness.

    Fair play to the Italians for wanting a ‘currency’ that fits their own economy for a change.

    On a related, this is why the UK’s industrial base had to be diminished, Germany doesn’t like competition.

    • margaret howard
      Posted June 17, 2019 at 3:32 pm | Permalink

      J Bush

      ” For a long time Merkel crowed over these countries boasting how efficient Germany was! Prior to the euro, Germany wasn’t a ‘powerhouse’. ”

      Really? Ever heard of the ‘Wirtschaftswunder?’

      “The term Wirtschaftswunder, also known as the Miracle on the Rhine, describes the rapid reconstruction and development of the economies of West Germany and Austria

      The era of economic growth raised West Germany and Austria from total wartime devastation to developed nations in modern Europe. At the founding of the European Common Market in 1957 West Germany’s economic growth stood in contrast to the struggling conditions at the time in the United Kingdom. ”

      The expression referring to this phenomenon was first used by The Times in 1950″

      Germany’s success has nothing to do with the introduction of the euro and she was in fact reluctant to replace the successful Deutsche Mark.

      It helps to get ones facts right!

      • APL
        Posted June 17, 2019 at 9:57 pm | Permalink

        margaret howard: “The era of economic growth raised West Germany and Austria from total wartime devastation to developed nations in modern Europe. At the founding of the European Common Market in 1957 West Germany’s economic growth stood in contrast to the struggling conditions at the time in the United Kingdom. ”

        Ever heard of the Marshall plan?

        From wiki: “The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative passed in 1948 to aid Western Europe, in which the United States gave over $12 billion (nearly $100 billion in 2018 US dollars) in economic assistance to help rebuild Western European economies after the end of World War II.”

        $12Bn in 1948, was worth a bob or two. But it probably didn’t make a difference until the founding of the European Iron and Steel community in 1951.

        Then of course, no reconstruction happened until the introduction of the common market in 1957.

        • margaret howard
          Posted June 18, 2019 at 10:27 am | Permalink


          “Ever heard of the Marshall Plan?”

          $3.3 billion for the UK
          $2.3 billion for France,
          $1.4 billion for Germany
          $1.2 billion for Italy, and
          $1.9 billion for the Benelux countries over the period 1948 t0 1951.

          The amount of monetary aid (in the form of loans) received by Germany through the Marshall Plan was far overshadowed by what they had to pay back as war reparations and by the charges the Allies made for the ongoing cost of occupation ($2.4 billion per year)

          The UK also received a further $4.6 billion from the US in direct loans unrelated to the Marshall plan. In other words, the UK benefited far more than any other country.

          • Edward2
            Posted June 18, 2019 at 1:23 pm | Permalink

            Interesting that you define a loan as a benefit Margaret.

  15. Andy
    Posted June 16, 2019 at 7:31 am | Permalink

    Italy shows the danger of having know-nothing ‘populists’ running things.

    So does the United States.

    Two great countries disgraced by their miserably incompetent leaders.

    Having successfully ‘taken back control’ from undemocratic Brussels (which I had a vote for last month), the Conservative Party is now going to install its own know-nothing populist as leader.

    Sure, he can guffaw in Latin but the big blonde oaf does not do detail. He is more game show host than leader. We might as well go the whole hog and replace PMQs with Have I Got News For You.

    Like Mr Trump he is also very thin skinned. He does not like criticism.

    He has no idea of the tsunami of contempt coming his way. It’s going to be funny.

    • agricola
      Posted June 16, 2019 at 10:35 am | Permalink

      You mansge to guffaw in English to even less effect.

    • Edward2
      Posted June 16, 2019 at 10:50 am | Permalink

      Populist…a person voted in by the people or a policy liked by the people.
      But not by the know it all ever so superior left liberal intelligentsia.
      Your smugness and snobbery comes through in nearly every post Andy.

    • Times
      Posted June 16, 2019 at 11:06 am | Permalink

      So you think Boris speaks in Latin. I understand you are not acquainted with his tongue. It is foreign to you though his language is not Latin. It is English. Who and what are you?
      You cannot hear Trump either. Figures!

    • William Long
      Posted June 16, 2019 at 11:12 am | Permalink

      I cannot understand why the term ‘Populist’ should be one of derision. It simply means ‘ of or for the ordinary people’ and is therefore another term for democracy. That is only derisible if you do not believe in it, which from your post, it would appear that you do not. You would do well to ponder on why it is that populism is becoming such a force and why so many people preferred Mr trump to all other comers.

    • what tiler
      Posted June 16, 2019 at 11:15 am | Permalink

      It’s great that JR’s blog has it’s own resident comedian. He’s here all week folks, try the fish, and don’t forget to tip your waitress.

      • Fed up with the bull
        Posted June 17, 2019 at 9:24 am | Permalink

        what tiler. Yes, I agree. I always skip down to Andy’s posts for the laugh of the day before I read the blog properly. He never fails to amuse with Margaret Howard.

    • Richard1
      Posted June 16, 2019 at 2:16 pm | Permalink

      The US is booming.

    • NickC
      Posted June 16, 2019 at 3:51 pm | Permalink

      Andy, Have you found out yet why the UK, uniquely amongst the other 165 nations in the world, cannot be independent of the EU (as you maintain)? If only we had a leader as good as Trump (or Pence, for that matter). And I know that Boris enjoys a joke at his own expense. Whereas I have yet to see you enjoy a joke at all (and, no, I don’t count your sneering at the imagined faults of others, as a joke).

    • L Jones
      Posted June 16, 2019 at 8:44 pm | Permalink

      Andy – you make yourself sound such a drip.
      Perhaps it doesn’t take much effort on your part though!

    • Anonymous
      Posted June 16, 2019 at 9:23 pm | Permalink

      Not just a Remainy but clearly a Lefty too. Purporting to be a Conservative – and there lies the whole problem.

  16. Ken Barron
    Posted June 16, 2019 at 7:33 am | Permalink

    Yeah, bits of paper issued by dodgy Italians versus the Euro, one of the world’s two reserve currencies. I expect the ECB is really worried. Or, put another way, wouldnt you be better focusing on how Brexit has crashed the pound?

    • Roy Grainger
      Posted June 16, 2019 at 10:11 am | Permalink

      I’m sure John will address that when Brexit actually happens. Fluctuations in the pounds value to date have happened while we have been full members of the EU – so why don’t *you* explain it for us ?

      • Ian wragg
        Posted June 16, 2019 at 3:50 pm | Permalink

        Before the referendum I remember getting €1.07 to the £. What was the cause of that do you think

    • Fred H
      Posted June 16, 2019 at 10:18 am | Permalink

      It is the continuing refusal to give up on the fact remain lost that has caused the problems.

      • GeraintDavies
        Posted June 16, 2019 at 3:58 pm | Permalink

        So if all remainers had said “ we lost”, the EU would have immediately agreed to all the UKs demands? Is that your view?

    • margaret howard
      Posted June 16, 2019 at 10:58 am | Permalink

      Ken Barron

      “bits of paper issued by dodgy Italians versus the Euro, one of the world’s two reserve currencies”

      Do the EU/euro haters here never pause to think why countries like Italy and Greece keep voting for pro EU parties?

      Or mention why EU/euro countries like Austria, Belgium, Cyprus, Finland, France, Germany, Ireland Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain are thriving?

      Or why no state has left (we crashed out)? Or why Andorra, Monaco, San Marino, and Vatican have chosen the euro for their currency?

      Their blind hatred is palpable.

      • NickC
        Posted June 17, 2019 at 9:12 am | Permalink

        Margaret Howard, There is good reason to be opposed to the Euro. It is because the Euro is an “average” currency: its value is too low for Germany, and too high for Italy, for example.

        The consequent economic strains are so severe that one of two things must happen: the EZ will disintegrate; or the EZ will become one fiscal and financial state. The EU of course is counting on the latter. Unlike others, I think they will succeed.

        The question is – is this a good thing? I do not think so, because the nation is the largest area in which liberty, democracy and free trade can flourish. The EU is not democratic because there is no direct democratic control of the EU government, and no demos either.

        The EU is a bureaucratic reconstruction of the Roman empire. It is relatively benign, provided you toe the line. However, the evidence shows the EU is anti-democratic, anti-Christian, corrupt, self-serving, and dirigiste. It is therefore intrinsically evil, and must be opposed.

      • Fed up with the bull
        Posted June 17, 2019 at 9:25 am | Permalink

        MH. Spain??? thriving??? I think you need to take a long hard look at the country Margaret.

      • libertarian
        Posted June 17, 2019 at 9:46 am | Permalink


        This list of THRIVING countries perhaps you could give us some evidence of exactly in what way they are THRIVING

      • Know-Dice
        Posted June 17, 2019 at 5:12 pm | Permalink

        Hmm.. could be that 19 out of 28 pay in less than they take out…

    • NickC
      Posted June 16, 2019 at 3:54 pm | Permalink

      Ken Barron, The Euro is also just “bits of paper” too.

  17. Iain Gill
    Posted June 16, 2019 at 7:43 am | Permalink

    Trump tweeting about the London mayor is hilarious, upsetting all the lefty commentators.

    • Roy Grainger
      Posted June 16, 2019 at 10:13 am | Permalink

      What they all miss out is the first step where Khan called a press conference and called Trump a 21-st century fascist. Then he whined when Trump responded.

      • Richard1
        Posted June 16, 2019 at 2:19 pm | Permalink

        Indeed khan is a fool and a disgrace to London. It is odd that President Trump thinks he is worthy of notice but the President is certainly right we need a change of mayor. Can’t get one until next year unfortunately.

  18. Dave Andrews
    Posted June 16, 2019 at 7:49 am | Permalink

    Italy has a massive debt problem, that’s what it’s all about. I note the Remain press keeps quiet about it – mustn’t give anyone the impression that everything isn’t going swimmingly in the rest of the EU.

  19. A.Sedgwick
    Posted June 16, 2019 at 8:28 am | Permalink

    Sounds like the scheme small towns use to keep visitors spending money in their shops.

    Similarly whenever I have travelled to Scotland and the Chanel Islands I endeavour to spend all their notes and coins before leaving. Difficult to see the difference with the Italian scheme.

    • Fred H
      Posted June 16, 2019 at 10:19 am | Permalink

      yep…..just a ‘local’ sub-currency to avoid trading with the Euro. Totally understandable.

  20. Iain Moore
    Posted June 16, 2019 at 8:45 am | Permalink

    When the Euro was proposed didn’t Mrs Thatcher suggest is should be as a parallel /reserve currency, a suggestion the Italian leader gleefully and publicly shot down?

    • Tom Lillis
      Posted June 16, 2019 at 10:11 am | Permalink

      Yes, in 1990 then Chancellor John Major proposed the “Hard Ecu”. It would have been a parallel currency designed specifically for forex transactions.

      I wonder whatever happened to him…

      • Fred H
        Posted June 16, 2019 at 10:20 am | Permalink

        spends his time watching cricket….doubt he understands much about that either.

        • Lifelogic
          Posted June 16, 2019 at 6:19 pm | Permalink

          I blame Margaret Thatcher for appointing Major a total dope who left school with just three O-levels (in History, English Language and English Literature) as Chancellor! Then even letting him become PM.

          Someone who clearly could not really even add up or think remotely logically. As she showed in spades (by entering and remaining in the ERM) and still shows his abject stupidity in every tedious interview he does (endlessly on the dire, lefty, pro remain, BBC needless to say).

          • Lifelogic
            Posted June 17, 2019 at 12:38 am | Permalink

            As “he” showed in spades …

    • margaret howard
      Posted June 17, 2019 at 11:01 pm | Permalink

      Iain Moore

      “When the Euro was proposed didn’t Mrs Thatcher suggest is should be as a parallel /reserve currency”

      So instead the Euro has supplanted the £ as the world’s reserve currency after the $ and the £ is dropping like a stone against it.

      Oh the irony!

  21. Rien Huizer
    Posted June 16, 2019 at 9:00 am | Permalink

    Mr Redwood,

    This is a relatively old idea and given publicity again for propaganda reasons. It would be attractive to money launderers and lead to a back market (they would be denominated in Euro but are basically untraceable, like banknotes. Of course that would be in line with Italian financial tradition, the country having one of the largest informal sectors in Europe.

    Would it provoke a reaction from the ECB? Unlikely so, but the Eurogroup would simply repeat existing policy (that you state correctly). I would say, let them print and see what happens.

    It is a pity that Italy does not want to argue in its own defense, probably out of fear that reasoning with the EU in public (privately there is no problem from what I hear) with rob them of a useful enemy that they could use to wegdge the 5 stars, their partner-enemy.

    That defense would be that some other countries do not properly account for unfunded gvt pension liabilities (but try to adhere to the stability pact) while Italy does not have a lot of gvt pension liabilities in the first place and Italians save (often from informal earnings) individually and invest in get bonds or in savings products issues by banks (that until recently used to be seen as gvt backed).

  22. jerry
    Posted June 16, 2019 at 9:12 am | Permalink

    I wonder how many on this site would accept the SNP unilaterally issuing Euro coins and notes rather than Bank of Scotland coins and notes, as a parallel currency to the official GBP?…

    • Edward2
      Posted June 16, 2019 at 10:52 am | Permalink

      I would Jerry.
      We would then just reduce the Barnett formula by an equal amount.

    • Tegger
      Posted June 16, 2019 at 11:05 am | Permalink

      Scotland isn’t an independent member state. They voted to remain part of the UK.

    • mancunius
      Posted June 16, 2019 at 11:15 am | Permalink

      If they were indeed to pretend to be euros, the ECB would immediately declare them valueless, and the Scots would not accept them. The printing press would be raided as it was illegal under EU law, and its operators and instigators charged and imprisoned.

    • Know-Dice
      Posted June 16, 2019 at 11:20 am | Permalink

      How would the EU accept the SNP issuing fake Euros?

    • Andy
      Posted June 16, 2019 at 11:22 am | Permalink

      The SNP doesn’t have the power to do that. The Scottish Parliaments powers are limited by Statute. The powers of the Italian State are constrained by Treaty.

    • Jiminyjim
      Posted June 16, 2019 at 12:13 pm | Permalink

      I struggle to accept, Jerry, that you can actually believe the complete nonsense that you post on this site. Do you not know that the SDP went out of their way during their independence referendum to stress that they would not accept joining the Euro, but insisted that they would instead use sterling, with or without the approval of the Bank of England?

      • jerry
        Posted June 17, 2019 at 7:19 am | Permalink

        Jimmy, not as much nonsense as your proof reading is, what ever the SDP said is surely irrelevant! The SNP, though, also said that it would be a once in a generation indi-ref. My point was very much about the liability of the BoE, if the SNP decided to issue Euro’s rather than BoS notes whilst still in the UK the BoE would then be acting as the underwriter to the Euro – something we have an opt-out from.

    • Narrow Shoulders
      Posted June 16, 2019 at 1:54 pm | Permalink

      If it replaced Barnett and only Scotland was responsible for the debt Jerry………..

      • jerry
        Posted June 17, 2019 at 7:29 am | Permalink

        @NS; It would do neither, the Bf would remain and the BoE would ultimately be the underwriter of any debt – just as the ECB will be with this proposed alternate Italian parallel currency.

        • Narrow Shoulders
          Posted June 17, 2019 at 6:20 pm | Permalink

          you asked if I would be in favour Jerry.

          I gave my terms

          • jerry
            Posted June 18, 2019 at 6:18 am | Permalink

            @NS; Indeed you did, and as such you might as well have asked about the price of Haddock….

    • NickC
      Posted June 16, 2019 at 4:06 pm | Permalink

      Jerry, Probably not many because it’s a moronic suggestion. That’s because the SNP is a political party, not a bank, or a state. Also because the ECB would be unhappy about it, since they have a monopoly on Euros.

      If you bothered to follow the Scotland independence debate the SNP did propose that an independent Scotland would issue its own Scottish pound. Once independent they could issue whatever currency they wanted as long as it did not infringe on other nations’ currencies.

      • jerry
        Posted June 17, 2019 at 7:26 am | Permalink

        @NickC, Talking of “moronic suggestion”…

        “the SNP is a political party, not a bank”

        Except the SNP are the Scottish Govt.

        ” the SNP did propose that an independent Scotland would issue its own Scottish pound. [..//..] Once independent they could issue whatever currency they wanted”

        The SNP lost support because it said it would issue it’s own currency but join the EU, the latter would require them to use the Euro,. indeed EC reminded them of that requirement.

    • libertarian
      Posted June 16, 2019 at 4:41 pm | Permalink


      We will never know seeing as 1) The English are never asked their views on the Union 2) The SNP are such a load of daft socialists that they completely missed the opportunity when arguing about a post referendum independent Scotland

      • jerry
        Posted June 17, 2019 at 8:37 pm | Permalink

        @libertarian; “The English are never asked their views on the Union”

        I didn’t ask the nation, just the readers of this site, and I have never known anyone here being backward in coming forward with their views on the Union!

        But thanks for the reply non the less, yet again you prove that you do not actually bother to read or, more likely, understand the point others are making before your knees jerk and you bang out a facts-less response…

        As for your second point, might that have been something to do with the then predictions of the imminent demise of the Euro, back in 2014 and before, due to the then ongoing Eurozone crisis – a point surely not missed by Salmond, himself a career economist with HMG (GES) and RBS before he entered politics full time.

    • outsider
      Posted June 16, 2019 at 5:02 pm | Permalink

      No problems here Jerry, assuming no coins (forgeries under EU/international law) or impractical tax credit certificates. So long as Scotland remains in the UK, however, it is part of a basically unitary budgetary system that operates, as it were, on the basis of people and places contributing according to means and the Exchequer distributing (imperfectly) on the basis of defined need. That does not happen in the eurozone, which, as Sir John has so often pointed out, is what creates such problems for Italy and others.
      If a Scottish Government issue counted as debt, it would be subject to the current overall limit of £3 billion. If, as more likely, it counted either as issuer profit or a reduction in Scottish spending needs (since it would substitute for wages etc) , it would simply reduce the block grant virtually pro rata.

    • mickc
      Posted June 16, 2019 at 5:57 pm | Permalink

      Why would that be a problem? There are already many competing currencies, let alone defining “money ”

      If it was accepted by people as a valid currency then it would be. It really is just a market.

      • jerry
        Posted June 17, 2019 at 6:42 pm | Permalink

        @mickc; “Why would that be a problem?”

        The BoE ultimately having to underwrite the BoS exposure to the Euro perhaps, after all the BoS/BoE do “promise to pay the bearer (of the legal tendered currency) on demand the value of [that printed on the face of the presented banknote/coin]”…

        We are not talking about private currencies such as Bitcoins or even a gift-cards/credit-notes here, we are talking about a State issuing a parallel currency, underwritten by the relevant central bank.

  23. Fran
    Posted June 16, 2019 at 9:16 am | Permalink

    The EU is concerned that there are a number of EU rogue governments out there that will have to be challenged and reined in and so this is just another reason why there will be no chance of them reopening the WA-

    • mancunius
      Posted June 16, 2019 at 11:08 am | Permalink

      Ah, but Fran, what if the EU Commission and ECB is forced to take a look at themselves in the glass, and see which is the true ‘rogue government’. 😉

      As the German saying has it, the pitcher can only go so many times to the well before it is broken.

      The WA is dead. Long live our post-brexit trading agreement with the countries of Europe.

    • NickC
      Posted June 16, 2019 at 4:07 pm | Permalink

      Fran, The EU is a rogue government.

  24. Shieldsman
    Posted June 16, 2019 at 9:24 am | Permalink

    Matteo Salvini is determined to take all measures he can as a populist to improve the lot of the Italian people.
    He does not worry about upsetting the Brussels bureaucracy or being a thorn in their side.
    With the new unelected top dogs and MEP’s sparks are sure to fly in Strasbourg.

    • Ian wragg
      Posted June 16, 2019 at 3:54 pm | Permalink

      As long as they were spent in Scotland no one would give a monkies. For “populist ” read “realist “.

  25. BR
    Posted June 16, 2019 at 9:33 am | Permalink

    Isn’t the most interesting development that this is due to the EU threatening to fine Italy over its debt:GDP ratio which is higher than the rules allow, presently at 132% and heading for 133.8% if forecasts are correct.

    The real question here is: why (only) Italy? Other EU countries including France are outside the permitted parameters and yet the EU are not proposing to fine them; only the coalition of so-called populists in Italy.

    This has the capacity to bring down the Euro. Personally, I hope it does but also that we exit before there is any contagion effect.

    One minor correction. BOT is an acronym for buono ordinario del tesoro, which is an ordinary short-term Italian treasury bill. They would not only be €10, €20, €50 but would be issued in all ‘small-value’ notes in the range €1 to €500.

    Reply There are no plans for 1,2,3,4 Euro denoms. My article is accurate. It will not be an ordinary TB as there is no repayment date.

  26. Gareth Warren
    Posted June 16, 2019 at 9:47 am | Permalink

    At first note a currency that earns no interest with limited backing appears weak, but it is a known fact that bad money drives out good money.

    As this goes into circulation people will naturally prioritise spending the weaker currency first. I can only suppose that one day the plan is the Italians will wake up de-facto outside the Euro without any laws passed and all the uncertainty and panic normally occurring due to such events.

    It remains to be seen how strongly the ECB act against such an existential threat, like our remainers I expect them to bring in severe punishments that can only make a bad situation worse, logic is not something they respect.

    The backdrop to this is a UK finally exiting the EU with £10 billion net less revenue for EU budget and likely tariffs erected, a Germany sliding deeper into recession, an EU pressured by the US to reduce exports/increase imports with likely tariffs employed, and a stagnant Italy steadily increasing an unplayable debt.

    The future for the UK looks bright, the EU looks … interesting.

  27. Derek Henry
    Posted June 16, 2019 at 9:57 am | Permalink

    It is Mosler bonds.

    Warren Mosler the father of MMT came up with the idea over 5 years ago.

    MMT is the only true description how monetary systems operate which is neither ideological or political but based on accounting fact.

    I’ve been on the BBC radio talking about it.

    The Italians are being advised by a group of MMT economists they’ve been advising Italy for several years now. Only a matter of time before they try and get out of the Euro.

    I set up MMT Scotland this year and I’ve been warning you all on here for over a year now whoever is left with the lies that.

    Taxes fund government spending

    Government finances operates like a household budget

    Don’y understand that government deficits are non government sector surpluses

    Are going to be wiped out at the ballot box for lying to voters for nearly 50 years now.

    • NickC
      Posted June 16, 2019 at 4:23 pm | Permalink

      Derek Henry, MMT is a scam. It’s just the latest ploy to justify money printing. Governments (the monopoly providers of fiat currencies) cannot, as you assert, print whatever they need to finance all the usual dreams of dim people like Corbyn.

      The reason? Because the excess “money” gets noticed – because there is 10% more money in the economy than there was last year, but not a 10% increase in the productive capacity of the economy. So the amount of currency no longer matches the amount of production at the same ratio. Your way gives us the Weimar republic, Zimbabwe, and Venezuela.

  28. Derek Henry
    Posted June 16, 2019 at 10:04 am | Permalink

    They have been xperimenting with paying for public services with tax credits. Presumably, this is happening because Italy doesn’t possess enough Euros to pay its citizens to provide all the goods and services needed to maintain and run the public sector of its social economy. And Italy can’t “create” the additional Euros it needs because that prerogative is the exclusive right of the EU Central Bank which Italy, even as a sovereign member of the EU, has no control over.

    Italy still needs to have the grass mowed and the weeds pulled in its public gardens. So it has been playing with the idea to pay the gardeners with tax-credits. The gardeners are willing to do the work in exchange for the government’s tax-credits, because it means the Euros they earn (in other ways) can then be used to purchase goods and services rather than for paying their taxes. So, in practical terms, it is “just like” getting paid in Euros.

    Presumably, the tax-credit payments described take the form of notations on the gardeners’ tax account. An hour’s worth of weeding is noted as 15 Euros worth of extinguished taxes. If the gardener has a tax liability of, say, €3750, their taxes would be completely paid after providing 250 hours of weeding and pruning. After that, obviously, they would have no more incentive to provide any services in exchange for the tax-credits. So the amount of services Italy can obtain in this fashion is directly limited by the amount of tax liabilities it can impose on its citizens.

    It would be possible, however, to structure the tax-credit payments in another way which would have a very different outcome. Instead of making the payment as a credit notation on a citizen’s tax account, the Italian government could issue paper tax-credits and pay them to the citizens for their gardening services. To be specific, this would be a piece of “official” paper, signed with an important signature, on which was printed something like the following:

    The Sovereign Italian Government promises the bearer of this paper ONE EURO of credit on taxes owed to the Sovereign Italian Government.

    This amounts to exactly the same thing as making a direct credit on a citizens’ tax account, but we now have set in motion a curious set of subsequent economic actions: Now, after an hour of weeding, upon receiving her 15 paper tax-credits―for convenience, let’s call them “PTCs” and give them the symbol β―the gardener can choose to do the following. She can put the PTCs under her mattress for safekeeping until the day her taxes must be paid. Or she can use the β15 to purchase a lasagna dinner at her neighborhood trattoria. The owner of the trattoria is willing to accept the PTCs in exchange for the lasagna, garlic bread, and wine because he, too, has to pay taxes to the Italian government. So, for all practical purposes, receiving the PTCs is just the same as receiving Euros for him as well.

    Now we have to ask an important question: Is the amount of services Italy can obtain by issuing and “spending” its paper tax-credits still directly limited by the amount of tax liabilities it can impose on its citizens? In other words, if every Italian citizen theoretically has received enough PTCs to pay their taxes with—either having received them directly from the government for providing public services, or having received them from other citizens in exchange for lasagna dinners—will the citizens’ willingness to exchange real goods and services in exchange for the PTCs come to a halt?

    Crucially, the answer is No. This is because the act of “embodying” the tax-credits in exchangeable pieces of paper has given the PTCs a usefulness in addition to their usefulness as tax payments: This additional usefulness, of course, is the ability to use them to buy goods and services from other Italian citizens and businesses. Thus, the number of paper tax-credits in “circulation” could vastly exceed, at any given time, the total actual tax liabilities of the Italian citizenry. The PTCs would continue to be accepted for lasagna dinners, because the Trattoria owners know they can use the PTCs they receive to subsequently buy Italian shoes and motorcycles— in addition to using them to pay their taxes.

    It will no doubt have dawned on most every reader that what we’ve just created is “money.” Specifically, we’ve created what is called “fiat money”—which happens to be the kind of money the world has been using now for the past half century (ever since the U.S. formally abandoned the gold-standard in 1971). Having thus conjured a rudimentary image of fiat-money to life we should quickly make some important (and perhaps startling) observations about it.

    Observation 1: How does the PTC “currency” come into existence? The sovereign Italian government creates it. Paper tax-credits are not created by Italian banks, nor are they borrowed from China—or even the EU Central Bank. They are printed by the Italian government. Note: PTCs could also be created by the Italian government digitally—that is, with keystrokes that enter numbers in an electronic ledger of account. In either case, the point is ONLY the Italian government has the legal right to create them. Why? Because that is the prerogative of sovereignty and the definition of fiat money.

    Observation 2: How many PTCs can the Italian government create and spend? Or, to rephrase the question more precisely, how many times can the Italian government promise to accept one of its paper tax-credits in exchange for a Euro’s worth of taxes owed? The answer is simple: as many times as it wants! It doesn’t matter if all the taxes have been paid in full—it can still issue and spend the promise over and over again. The citizens will continue to accept the promise in exchange for real goods and services for two reasons: first, they know other Italian citizens and businesses will accept the promise as payment for lasagna dinners and, second, they know for sure that taxes due will come around again—and soon.

    Observation 3: If (as observation 2 suggests is possible) the Italian government just keeps issuing and spending its paper tax-credits (fiat money) to buy goods and services from its citizens, won’t the number of PTCs in circulation keep growing until, inevitably, the price of things in the Italian economy begins to skyrocket? A lasagna dinner that used to cost β15 suddenly costs β150! In other words: Inflation. The answer, of course, is Yes. So what can the Italian government do to keep a lid on the inflationary pressure created by its continued issuing and spending of PTCs? Two things:

    The government can continue to collect taxes from the citizens (or, if necessary, even increase the taxes in collects). Taxes will remove PTCs from circulation, reducing the number of them available in the market-place to buy lasagna dinners and Italian shoes. Taxes, then, have a dual virtue in a fiat money system: they continuously reinforce the citizens’ desire to earn the government’s paper tax-credits—and they drain the paper tax-credits out of the market place, helping to keep prices stable.

    The government can also create special savings accounts that citizens can put their excess PTCs in. The accounts would earn interest (paid by the government with new PTCs)—but the agreement would be that the citizen would leave their “old” PTCs in the account, untouched, for a period of time—say 10 years. This means a large number of PTCs which would otherwise be competing to pay for lasagna dinners would be replaced with a much smaller number of PTCs (the interest payments). The net result will be fewer PTCs buying goods and services in the market-place. If you want, you could call these special savings accounts “government bonds.”

    Historical Note: When the U.S. was in the midst of mobilizing to fight WW2 it was issuing and spending historical quantities of U.S. paper tax-credits (fiat dollars) to pay U.S. citizens to build battleships and bombers—and to pay the recruits in its growing army and navy. Inflation was, indeed, starting to become a problem. So what did the government do? Two things: it increased taxes, and it issued War Bonds. It even imposed a requirement that workers take a percentage of their pay in War Bonds. By 1943, inflation was brought back under control.

    Observation 3: What happens to the PTCs when they are presented to the Italian government as tax payments? The mind-money framework we learn from early childhood “tells us” that the taxes collected by a national government are what the government then uses to pay for public goods and services. Crucially, however, this IS NOT TRUE with a fiat-money system. Looking at the paper tax-credit system we’ve just described, it’s clear that (by logical necessity) the government FIRST issues and spends the paper tax-credit, then it accepts it back as a tax payment. At that point of taking it back, the tax-credit is of no further use to the government. It is simply cancelled: it becomes a particular citizen’s tax liability with a line drawn through it. If the government needs to spend another paper tax-credit, it simply issues a new one. (It is actually easier and more efficient to issue new tax-credits than to “recycle” old ones.)

    Observation 4: Is it logical for a sovereign government to borrow the paper tax-credits it has issued? Please try, for a moment, to wrap your mind around this question! Here is something that ONLY the Italian government can create, and something it can create as many of as it needs, at any time it needs them. Why would it ever want, or need, to “borrow” them from the Italian citizens? It is, therefore, illogical to imagine the Italian government ever being “in debt” to its citizens! The Government Bonds we mentioned previously are not a “debt” the Italian government owes to anyone—they are savings accounts which hold the citizens’ excess PTCs for a specified period time. When the bonds “mature,” the PTCs are simply transferred back to the citizen. In a fiat money system, therefore, it is illogical (and irresponsible) to imagine or describe U.S. Government Bonds as being the government’s “debt”—or, more specifically, to talk about that “debt” as being “unsustainable,” or to suggest the government cannot pay its citizens to undertake and accomplish some important task because it will “increase the government’s debt.”

    Having made these observations, it appears the Italian government has stumbled on an actual solution to the “austerity” it has been forced to impose on itself by the European Union. Except we must now confront the fact that the rules of the EU do now ALLOW Italy to issue and spend its own sovereign fiat currency! The only “money” Italy is allowed to use is the Euro—and the only way the Italian government can obtain Euros is either by collecting them as taxes from its citizens, or by borrowing them from the European Central Bank, which has the exclusive prerogative of issuing them. And these methods of obtaining Euros to spend are falling short of what Italy needs to pay its citizens to do. So…. Italy has decided to pay its citizens with tax-credits, and then (why not?) with paper tax-credits. And then, presumably, the EU says, “Whoa, hold on here! It looks like you are printing your own money, which is not allowed by our rules!”

    We could then proceed to an International Court in which Italy claims it isn’t breaking the EU rules because it isn’t printing “money” but is simply issuing tax-credits. The EU would then have to argue that “tax-credits” are, in fact, what “money” is! In making that argument, it would be forced to explain everything we’ve just explained which would, in turn, reveal and establish not only the absurdity of the Eurozone monetary system, but also that the whole world (including the U.S.) is misunderstanding and mismanaging its money system—and unnecessarily making a vast majority of the world’s citizenry miserable in the process.

    • Sir Joe Soap
      Posted June 16, 2019 at 11:18 am | Permalink

      Or in a sentence he who controls taxes controls currency issuage.

      Then, no taxation without representation brings us to the necessity of political union.


    • Monza 71
      Posted June 16, 2019 at 1:34 pm | Permalink

      Brilliant !!!

    • formula57
      Posted June 16, 2019 at 8:14 pm | Permalink

      @ Derek Henry – thank you: most illuminating.

      As for compliance with EU rules prohibiting the issue of own sovereign fiat currency, I understood Italy would contend that as no citizen will be obliged to accept mini-BOTs as settlement in any transaction, such instruments do not meet the normal definition of money and hence should not be caught by the EU rules.

    • mickc
      Posted June 16, 2019 at 8:20 pm | Permalink

      This is really interesting stuff! Thanks for posting it.

    • Gareth Warren
      Posted June 16, 2019 at 9:55 pm | Permalink

      Interesting, but Italy is still creating fiat to pay for things, in that system the tax credits will be spent first and Euro’s last – but both chase the same goods.

      But when someone needs to buy something expensive like a house then the government steps in to offer the loan, and determine the price of the loan. Either way there is a lot more government or no loans.

      If we had this system in the UK in the past 20 years we would have had a lot of inflation from it (New Labour) and likely a lot of people renting.

      The tax credit system looks like a good scheme to introduce a parallel currency, but at some point it would have to become the defacto currency. A system then where only government could loan/create money would not be able to determine the value of a loan (Exhibit A: Dianne Abbot deciding a loan).

    • Pominoz
      Posted June 17, 2019 at 3:02 am | Permalink


      Firstly – congratulations on what must be the longest post to pass moderation on
      this site.

      Secondly – A fascinating read. It would take a brave person to categorically agree or disagree with what you say. I am not brave, but thanks so much for your in-depth insight.

      Thirdly – I do hope the inevitable long-term unsustainability of the Euro is exposed sooner rather than later, thereby perhaps mitigating the utter disaster which awaits those countries still tied into it.

  29. bigneil
    Posted June 16, 2019 at 10:11 am | Permalink

    Or – -in plain English – — The EU is stamping it’s feet and saying NO – – VE MUST CONTROL EVERYONE AND EVERYTHING.

    • Steve
      Posted June 16, 2019 at 12:42 pm | Permalink


      ……but with a french accent eh.

    • GeraintDavies
      Posted June 16, 2019 at 4:01 pm | Permalink

      If you are big and strong, you can do that. The EU is. The UK is not. How is that “taky controlly” thing working out for you, hun?

      • Steve
        Posted June 16, 2019 at 9:15 pm | Permalink

        The EU is not strong, it’s heading for serious trouble and the Commission knows it.

        Italy and other EU captives are in a position to crash the euro, the far Right is gaining strength exponentially in virtually every member state, immigration is out of control, Germany is too dependent on Russia for energy. Ungrateful France is desperate to continue plundering UK maritime resources – as confirmed by Mr Macron himself, and to dump as many non EU migrants as possible on our Island.


      • Tegger
        Posted June 17, 2019 at 4:30 am | Permalink

        The UK that is the 5th biggest economy in the world with nuclear weapons, that UK?

    • ukretired123
      Posted June 16, 2019 at 5:14 pm | Permalink

      Similar to China trying to control Hong Kong!

      • Steve
        Posted June 16, 2019 at 9:18 pm | Permalink


        …..but, you might notice the majority of Hong Kong people are having none of it.

  30. Roy Grainger
    Posted June 16, 2019 at 10:14 am | Permalink

    Interesting idea. More interesting if they went for a full state-backed crypto-currency approach.

  31. Narrow Shoulders
    Posted June 16, 2019 at 10:27 am | Permalink

    Good negotiating tactic. Give us what we want or we will circumvent your rules.

    Hard to see how these bills can maintain parity with the Euro while Italy ignores the fiscal discipline imposed by the EU bank unless it drives the economy substantially.

    Keynesian helicopter money, the left should be very interested. I confess to being quite intrigued myself.

  32. Derek Henry
    Posted June 16, 2019 at 10:30 am | Permalink

    When lies are introduced to the current monetary system it dilutes our arguement.

    I’m all for brexit and it is 95% economically sound. The 5% that lets it down lets it down because it is a lie.

    The glaring lie is because we are leaving the EU and not sending X amount to the EU we now have more money to spend. That is complete nonsense.

    The UK government could spend £60 trillion on Monday morning if it wanted and New Zealand could spend 500 trillion on Monday morning if it wanted. They don’t because there is not enough skills and real resources in the economy to absorb that spending.

    People think the Norweigan oil fund gives Norway more money to spend it doesn’t.

    It all boils down to how many skills and real resources a country has and can be put to use without causing inflation. If you don’t have enough skills and resources to absorb the spending then you get inflation.

    Bank lending, tax cuts, government spending all face the same constraint.

    So just because we no longer need to send money to the EU after we leave does not mean we can then spend that money at home. There is nothing stopping us from spending that money in the UK on Monday morning apart from 2 things.

    The skills we have and the real resources we have. If you don’t have enough of these things then too much money will end up chasing too few goods and services = Inflation.

    The key is to plan what we want to do which is why the success or failure of Brexit will depend on the policies put in place after we leave.

    Those policies wether it is more commercial bank lending, government spending or tax cuts or a mixture of all 3 have to make sure that the private sector and public sector have time to adjust to make sure they can absorb the extra aggregate demand all 3 will cause.

  33. zorro
    Posted June 16, 2019 at 10:58 am | Permalink

    Essentially, a ‘greenback’ dollar/‘Bradbury’ pound solution…..


  34. mancunius
    Posted June 16, 2019 at 10:59 am | Permalink

    I’d love to be a fly on the wall when the next wave of German tourists are forced to take these minibonds as change for euros at a motorway petrol station.

  35. Billm
    Posted June 16, 2019 at 11:03 am | Permalink

    I’ve always considered a “Common Currency” amongst EU members better idea than the debilitating Single Currency they have now.
    The Euro was created by Germans for Germany and it is geared to German output. It really is a case of a square peg trying to fit that round hole for the Med States are not as productive as Germany and the only way they could make themselves competitive was their local currency FX Rate, now denied to them Is it any wonder they have 30+% unemployment amongst their youth?
    Of course the Germans would not like it because they would lose their competitive edge within the EU and that would never do.

  36. Everhopeful
    Posted June 16, 2019 at 11:17 am | Permalink

    I could not understood why Greece didn’t do similar.
    Seems a logical escape route.
    Thank goodness the UK never signed up for the Euro!
    Probably down to bad memories of ERM and Brown’s “ Five Rule Test”??

  37. Dominic
    Posted June 16, 2019 at 11:49 am | Permalink

    It seems Hunt and Stewart exist in a parallel universe. God forbid if these Remainers ever get near the door of No.10. We cannot take any more of these vacuous, unprincipled careerists.

    Someone, anyone save this nation from the EU, Marxist Labour and their entire client state before we all go stark, raving mad

  38. Denis Cooper
    Posted June 16, 2019 at 12:01 pm | Permalink

    If Remain had won the 2016 referendum then in all likelihood David Cameron and George Osborne would now be starting to talk about the huge benefits of scrapping the pound and adopting the euro, with William Hague writing supportive articles in the Daily Telegraph, and also in all likelihood we would be told that the vote to Remain in the EU had covered the possibility of adopting the euro and so no repeat referendum would be necessary.

  39. hans christian ivers
    Posted June 16, 2019 at 12:12 pm | Permalink

    Sir JR,

    Your explanation on the Italian initiative is interesting, however the LEGA only got half of the votes of their coalition partner at the Parliamentary election, so they are the smaller party in the government coalition not the bigger party as stated in your log.

    Reply They got fewer votes in the election but are now well ahead in polls and got more MEPs

  40. Dave Andrews
    Posted June 16, 2019 at 12:21 pm | Permalink

    I would be interested in what commentators think will happen to the value of the Euro if Italy reverted to the Lira.
    Their debt would still be denominated in Euros, which would support its value. However, the Euro would lose ground as an international reserve currency. Who would go next?

  41. MarkW
    Posted June 16, 2019 at 12:34 pm | Permalink

    We spend too much time speculating about what other countries are up to.
    Leave means leave and Italy has nothing to do with us..or am i missing something?

    • mancunius
      Posted June 18, 2019 at 1:42 pm | Permalink

      UK bank exposure…

  42. Steve
    Posted June 16, 2019 at 12:51 pm | Permalink

    Well done Italy.

    ….found the achilles heel of the EU – contagion !

    The Italians should just dump the Euro and go back to the Lira. They’ll be followed by other prisoner states also returning to their own currencies.

    Anything that contributes to the destruction of the EU is a good thing. Smashing the euro into oblivion is one way to hasten it.

    • hans christian ivers
      Posted June 17, 2019 at 2:31 pm | Permalink


      This is our greatest trading partner and it will also have a negative effect on us, if this most unlikely scenario was to happen. BUT YOU DO NOT CAre

      • mancunius
        Posted June 18, 2019 at 2:04 pm | Permalink

        Bit late for you or anyone else to ‘care’, Hans. The UK hasn’t the slightest influence over or responsibility for the euro. Our national interests were criminally ignored when it was set up. I*gnored by Paris, Berlin, Brussels, and the Blair government.
        One way or another, we were always going to be affected by the insane and selfish decision to launch ERM and then a currency without first unanimously agreeing and implementing the political and fiscal groundwork. Logically, we should have left the EU on 1st Jan. 1999.
        The Franco-German coercion of all the smaller European countries into the mercantilist fiscal web was the most selfish part.
        Open the window, and listen! You can hear the air filled with the noise of wing-flapping growing to a deafening crescendo… the sound of chickens all coming home to roost.

  43. Out of Time
    Posted June 16, 2019 at 1:19 pm | Permalink

    Something missing from Churchill’s speech but everyone thinks it is there. Well it is underneath and on two levels underneath
    “We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender”
    The missing: we shall fight them in the houses.
    He meant in the second level down The House of Yorkshire, The House of Lancashire , The House of….etc etc.
    He had a thing about English history and knew we would fight for our Houses, not in but out.And he missed it out! Leaving a space, a shape, that every writer has of course sensed during the last 80 years.

  44. ChrisS
    Posted June 16, 2019 at 1:24 pm | Permalink

    This is not a new idea (Yanis Varoufakis had a similar plan for Greece ) but it has been resurrected by the Lega at a particularly interesting time.

    The Italian Mini BOT would drive a coach and horses through the entire regulation of the single currency and the Italian economy is without doubt the biggest threat to the whole flawed edifice of the Euro. We can therefore expect Brussels to try and come down very, very hard on the Italians for even considering introducing it.

    However, it will be extremely hard for the Brussels elite to bring the Italians back under their very firm thumb. After all, Italy is a net budget contributor so they can’t use the threat of withholding funds as they are trying to do to the former Eastern Bloc members.

    How hard the Lega can push this will depend on the balance of forces between them and Five Star in the Italian Government plus, of course, the amount of public support.

    Personally I hope they go ahead and we can look forward to the disintegration of the Euro as a single currency. It was always going to happen sooner or later and the longer the Euro limps on, the worse it’s going to get.

    • mancunius
      Posted June 18, 2019 at 2:09 pm | Permalink

      If the EU tries to impose a fine, I hope and trust Italy will simply pay it in freshly-minted BOTs.

  45. Kees
    Posted June 16, 2019 at 1:55 pm | Permalink

    I don’t think the EU is too concerned about Italy at the moment but as soon as they dispose of Boris no doubt they will look at other matters- anyway it’s too soon after the EU elections and they are just getting sorted out- the new President of the Commission won’t be in place until October- probably- his first job will be to go over to the Parliament and help them sort out the 73 empty seats- it always comes back to furniture

  46. dave roderick
    Posted June 16, 2019 at 3:12 pm | Permalink

    bring back the bradbury pound and take the banks out of the loop and see how this country would bloom that is what the italians are proposing and good luck to them the greeks should have done that years ago

  47. Oliver
    Posted June 16, 2019 at 4:06 pm | Permalink

    Perhaps we can pay the £39B in some similar instrument, only exchangeable in the UK, and only when the backstop expires?

  48. Norman
    Posted June 16, 2019 at 4:39 pm | Permalink

    Talk about ‘the broad way of perdition…!’
    Reminds me of the oft quoted words attributed to early EU architect and former Belgian PM, Paul Henri Spaak (1899-1972): “We do not want another committee, we have too many already. What we want is a man of sufficient stature to hold the allegiance of all people, and to lift us out of the economic morass into which we are sinking. Send us such a man, and be he god or devil, we will receive him.”
    Surely to the average, decent hardworking Brit, all this stuff just shows how shaky everything is, and the world as we’ve know is headed for the buffers.

  49. Rick
    Posted June 16, 2019 at 5:39 pm | Permalink

    At least this diary pretends to speak for England, M Gove in this evenings C4 debate opening remark said that there is nothing more important to him than keeping Jeremy Corbyn out of government. So here we have it again, another example of myself, and my party before our future and the interests of our country

    • Chris S
      Posted June 16, 2019 at 9:46 pm | Permalink

      Many Labour MPs also realise that keeping Corbyn and his Marxist oppo out of Downing Street is in the best interest of our Country!

  50. Ian terry
    Posted June 16, 2019 at 6:47 pm | Permalink

    Sir John

    I am sure I am not alone when I surf through the net and follow the perceptions from very very experienced professional people that the whole economic arguments are heading full step into a dead end canyon. All the signs and previous mistakes from past years seem to be rearing their ugly heads, and one must ask oneself what have all these politicians learned over the decades? Nothing , three fifths of zilch.

    The UK when you encapsulate all the views and announcements from the so called experts and senior politicians it is something akin to a disaster movie with only the sound turned up ably reproduced by the BBC.

    We have the likes of Kenneth Clarke, Burcow, Grieve and others talking about destroying the next PM unless he does as they demand, we have a debt crisis which nobody wants to talk about, energy policies that are destroying our manufacturing base, lemming like rush to go all electric and Carbon free by 2050 and not any consideration how it will all be paid for or where the infrastructure is going to come from, blindly refusing to frack for gas to build a dynamic industrial base, ignore totally the problems arising out of the decommissioning of turbine blades and solar panels and the ever growing costs of the 24 to 38 age group who’s life style is adding billions to our future health budgets.

    All this has arisen over the last forty years or so and still the penny has not dropped that they way we select and chose our politicians is seriously to be found wanting. It is parliament that are making these decisions and most with little or no concern how they will be paid for let alone implemented.

    Parliament needs to look inwards at itself, reinvent the way it does business and above all been seen to be exceeding the expectations of the electorate. The actions of a few high profile bad losers are destroying the very foundation on which parliament was founded.
    They must be banished from public office forever without all the golden goodbye public handouts, they are a disgrace to the party they serve, parliament the country and above all the electorate. We deserve so much better. How much lower can UK politics sink?

  51. Debate?
    Posted June 16, 2019 at 7:26 pm | Permalink

    First: Channel Four did a Question Time and somehow had their neutral audience applaud in majority NO Deal off the table as brilliant as no five year old selling a doll would applaud.

    Second: At least tow technological devices via Channel Four ( I shall not explain)( I did not watch it all, too boring) to enhance a couple of Rory Stewart’s utterances. Didn’t matter! They got their tones wrong, and were obvious , hardly subliminal enough if that ever really works in practice. They are on 1950s linguistic media books!Possibly on other stuff too.

    Third: The ‘Empty Chair’ , showing Boris was not there with emphasis. A psychological stunt pulled by an American network ( pro-Democratic Party ) when Trump declined appearing, this time Boris in the UK delivered by the interviewer at the start ( pity the chair was used more effectively in getting the interviewer somewhere to seat himself out of the way of the camera) All was revealed online about Trump ‘s chair but British audiences apart from me and a few others read about it and saw it. Copycat Channel News. No originality. No Energy! Losers!

    Fourth: All the Tory names were definitely Remainers but Raab ( not the network’s fault)

    Fifth: Hunt not picked up on, when he said”If an agreement is ‘just round the corner’at the end of October then…( we know what he said!) DELAY.


  52. Steve
    Posted June 16, 2019 at 8:40 pm | Permalink


    “At least this diary pretends to speak for England”

    Pretends, being the operative word.

    Fortunately not all of us are taken in by this pretence. One may wonder why a poster can waffle on and on using 2,053 words to basically mention nothing of importance, yet tell it like it is in 50 or so words and your post is deliberately held in moderation for fear of upsetting the PC brigade.

    ……not everyone is taken in by John Redwood’s claims to be a champion of the cause.

    Politicians eh…..all the bloody same, wouldn’t you agree JR ?

  53. Monza 71
    Posted June 17, 2019 at 7:32 am | Permalink

    Today’s proposal from Labour’s deputy leader that the party should break its 2017 manifesto commitment and campaign all-out to Remain in the EU will turn out to be a highly significant event.

    If adopted at the next party conference in September, as seems likely, and the next Conservative PM is successful in taking us out of Europe the following month, it will pave the way for the next General Election to be all about re-joining the EU.

    We can see the line-up : Labour, LibDems, the Greens, the SNP and Plaid Cymru all for rejoining and the Conservatives, DUP and the Brexit Party on the side of Remain : in this case Remain will mean remaining a fully independent, sovereign country intent on keeping its rightful place in the world.

    We must understand that the Eurofanatics will never give up : to keep the Conservative Party honest, we will need Nigel Farage and the Brexit Party for many years to come, at least until we have indisputably established ourselves as a very successful country outside the EU.

  54. ChrisS
    Posted June 18, 2019 at 1:56 pm | Permalink

    If the single currency had been intended to be a practical tool rather than a political project intended to drive the member states towards a United States Of Europe, it would today be unnecessary.

    Mainframe computer systems, tablets and mobile phones now have computing power that were undreamt of when the Euro was being constructed. It would be perfectly possible today to operate seamlessly across 28 countries, each with their own currency. Businesses would simply have to agree a fixed mid-rate for contracts and hedge against currency movements but that is relatively inexpensive and could be completely automated.

    Travellers roam all over the world using instant currency converters on their phones to establish what the cost of anything is in their own currency, or any other, for that matter.

    My wife and I like to drive all over Europe on holidays but compared with 20 years ago we hardly take any cash, using a ( Halifax Clarity) credit card which gives close to the spot rate and levies no fees on any transactions, however small.

    There is therefore no real need for the Euro.

    • Martin
      Posted June 19, 2019 at 9:56 pm | Permalink

      Suggest you try buying a bus ticket in most EU countries with plastic or cup of coffee or beer in a small cafe/bar with plastic!

      The single currency means that transaction between companies in different Eurozone countries are nor affected by Forex fluctuations and companies do not have to hedge against currency movements. I wish I had bought a few hundred Euros more before Dave announced his EU referendum a few years ago( £1 = €1.40 as opposed to today’s £1= €1.12 ish) . These are valid in all Eurozone countries!

      Before the Euro was introduced I had lots of of little heaps of Irish Punts, Lira, French Francs, Deutsch-marks, Pesetas and Maltese Pounds.

  55. Martin
    Posted June 19, 2019 at 9:48 pm | Permalink

    I wonder how many of the anti-EU types who lurk on here, if they visited Italy would accept this “parallel currency” in their change or from a bank?

    I certainly would not, it will be an ever devaluing load of rubbish which only jingoistic simpletons will willingly use. I pity the poor souls coerced into trying to spend this “parallel currency”, shops, cafes and bars will soon give dreadful rates for it.

    Once the Italian state tries to pay their public sector workers in this “parallel currency” standby for strikes!

    • Martin
      Posted June 19, 2019 at 10:08 pm | Permalink

      P.S. Wonder if the Brexit Party MEPs will accept their wages being paid in this “parallel currency” ? LOL

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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