Italy Might Introduce Alternative Currency Notes

2019-06-28 Fri

Italy has been going through an economic crisis for many years due to unstable governments. The country adopted Euro in 2001, expecting some respite, but the Italian governments have instead overspent, leading to a national debt of €277 billion, which is 144 per cent of its GDP. To top it, it has to pay a European Commission fine of €3.5 billion for overspending.

The government is planning to introduce a parallel currency called “minibots” or mini-bills of treasury, bearing denomination from €1 to €50. As per their proposal, these notes will be valid only within Italy and will circulate along with euro currency. These treasury notes wouldn’t have any interest rate or maturity date. The government plans to use it to repay debts, pay social benefits or citizens can use them to pay taxes. Private businesses would be given the option to accept or reject them.

Experts believe that it’s illegal to issue mini-bills and Italy will be removed from the eurozone as a consequence. However, the Bank of Italy says that these notes would not be legal tender, and hence the move wouldn’t lead to a breach of Italy’s treaty with the European Union. Some believe that these notes will further worsen the economic condition. The party which has proposed this idea has also presented designs for these new notes. They feature Italian cathedrals, historic buildings, musician Arturo Toscanini, anti-Islamic journalist Orianna Fallaci, anti-mafia prosecutors, a soccer star, a poet, judges, and politicians. Some authorities claim that a lot of liras are also being used for illegal transactions within certain organisations even though they were demonetised in February 2002.

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