Global Policy Lab - A Parallel Currency For Italy Is Possible
How to Fix the Eurozone
Could this laid upwards last implemented inwards all Eurozone countries, every bit it does audio similar a skillful idea. KV
Rome tin attain the sack find command of its monetary policy without breaking the rules of the eurozone.
In Joseph Stiglitz’s recent article for the POLITICO Global Policy Lab (“How to Exit the Eurozone,” June 29, 2018), the Nobel-prize wining economist proposes that Italy number a parallel currency every bit a agency to retake command of its monetary policy.
It’s an insightful idea, as well as i worth exploring. However, Stiglitz is incorrect when he suggests that “introducing a parallel currency, fifty-fifty informally, would close for sure violate the eurozone’s rules as well as for sure last against its spirit.”
Our arrangement — the Group of Fiscal Money — has been really active inwards developing as well as promoting such a dual-currency scheme. We telephone phone it “Fiscal Money” as well as believe it could last used to avoid the uncertainties of exiting the euro spell allowing Italy to recover economically without breaking whatsoever European Union rule.
Our proposal is for regime to number transferable as well as negotiable bonds, which bearers tin attain the sack purpose for revenue enhancement rebates 2 years afterward issuance. Such bonds would send immediate value, since they would contain sure claims to futurity financial savings. They could last right away exchanged against euros inwards the financial marketplace or used (in parallel to the euro) to buy goods as well as services.
Fiscal Money would last allocated, gratuitous of charge, to supplement employees’ income, to fund world investments as well as social spending programs, as well as to cut back enterprises’ revenue enhancement on labor. These allocations would growth domestic need as well as (by mimicking an exchange-rate devaluation) amend firm competitiveness through a reduction inwards the toll of labor. As a result, Italy’s output gap — that is, the deviation betwixt potential as well as actual gross domestic product — would closed without affecting the country’s external balance.
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