Italian lira better than euro: is Bloomberg right ?

10,000 lire banknote with scientist Alessandro Volta’s portrait.

A Bloomberg article by Lukanyo Mnyanda and Emma Charlton compares euro unfavorably with the old Italian lira.

Euro, it is argued, is a too strong currency, especially for peripheral Member States. Those Member State should depreciate their currency, exactly like Italy did in the past with its lira.

The article will surely strike a chord in Italy, where there is plenty of nostalgia for the old lira. The maverick politician Beppe Grillo, for example, openly advocates leaving the Eurozone.

Many other people wouldn’t agree with the analysis of the authors, however.

Even before Italy joined the euro, the lira devaluation was accused of being a cheap trick to subsidy an uncompetitive economy, and is now blamed for allowing an inefficient economic and social system to survive so long, thus becoming impermeable to change and reform.

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