Founder of Italian ruling party 5-Star urges euro plan B, referendum

July 27, 2018

ROME (Reuters) – Italy should have a “plan B” to quit the euro zone if economic conditions dictate, the founder of the co-ruling 5-Star Movement said, sending ripples through financial markets.

The anti-establishment movement’s founder Beppe Grillo holds no post in the coalition where 5-Star governs with the League. But his remarks may fuel new doubts over Italy’s intention to maintain the single currency.

“You must have a plan B,” Grillo said in an interview on Friday with Gzero Media, a subsidiary of risk analysis firm Eurasia Group.

He added that the country had not devised any contingency plan yet, and Italians should vote in a referendum to see if a majority wanted to quit the currency.

Prime Minister Giuseppe Conte and Economy Minister Giovanni Tria have both said the government has no intention of leading Italy out of the euro.

However, Italian shares erased gains on Friday and two-year bond yields briefly hit a two-week high. Traders cited Grillo’s comments, which echoed the controversial position of Italian minister for European affairs, Paolo Savona.

“I am sure that Germany and France have their plan B,” Grillo said, citing the two largest economies of the euro zone. “I am not saying that we should quit the euro without discussion, but we should let the Italian people decide with a referendum.”

Savona was forced to renounce the post of finance minister because of his statements on the need for such a contingency plan.

Grillo remains influential but plays little role in the day-to-day management of the 5-Star Movement.

(Reporting by Francesco Guarascio; Editing by Crispian Balmer and David Stamp)

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July 27, 2018 at 08:20PM
from One America News Network