analysis  › Markets

Yes or no to the euro, a serious and constructive debate. Here are the rules

by Luigi Zingales

24 Exclusive content for IT24

Among the Italian political parties, the Northern League is openly anti-euro. The 5-Star Movement, Forza Italia and Fratelli d’Italia are more ambiguous, between proposals for a parallel “fiscal currency,” illegal in the context of European monetary union, and an improbable referendum that would force Italy to leave the euro with the polls still open.

To the left of the Democratic Party, loyalty to the euro seems to prevail still, but it is not obvious what could happen if French radical left-wing candidate Jean-Luc Melenchon (ready to leave the euro if European treaties are not revised in a pro-growth direction) should end up in the run-off in France.

In any case, it is probable euro-skeptics will be in the majority of the next Italian Parliament. Italy's unilateral exit from the euro is therefore not a remote idea, but a serious possibility that should also be discussed seriously.

Nevertheless, in the large part of newspapers it is not being considered, or at least not in a serious way. The debate – if it ever started – has degenerated into a stadium shouting match, between those who think the single currency is the cause of all problems, and those who are not even considering the possibility that Italy could take back monetary sovereignty, as if Italians had a genetic incapacity to govern themselves.

It is true (as Alesina and Giavazzi write in Corriere della Sera) that this debate can be counter-productive because it creates uncertainty and distracts attention from other problems (such as Italy's inability to grow).

But when half the country is calling the single currency into doubt, avoiding a debate on the subject is equivalent to betraying the function that the newspapers (and especially the experts in the newspapers) should serve.

Unfortunately, the category of economic experts is not very popular. This is partly due to the fact that many self-styled experts made catastrophic predictions for the economic consequences of Brexit and the “No” in Italy’s constitutional referendum. Predictions that were based more on the political passion of the expert than their economic expertise.

I believe strongly in the value of intelligent and constructive debate and I think that an economic newspaper like Il Sole 24 Ore has the duty to host that debate: not with the aim of convincing readers in one direction or another, but to inform them.

For this reason, I asked the chief editor Guido Gentili (who has said he is in agreement) to open the pages of our paper to the contributions of Italian and foreign economists on the subject. Ten years ago, this debate took place also within the European Central Bank (see the work of Fratzscher and Stracca in 2009 with the title “Does it Pay to have the Euro? Italy’s Politics and Financial Markets Under The Lira and the Euro”)

Why can’t we reopen the debate today, after the crisis of 2011-2012?

So that it is constructive, this debate has to happen within a framework of a few rules. The first is formal decency. Personal attacks and insults will not be accepted. The second is decency in substance: every assertion should be justified with an academic reference or with the clarification that it is a personal opinion.

The third is to divide the debate into different topics.

When deciding if staying in the euro is preferable to returning to the national currency, we should consider three aspects. First of all, we need to ask if in the long-term it is preferable for a country like Italy to have a shared currency with the rest of (Northern) Europe or not.

Secondly, we should look at how big (and long-lasting) the advantages and disadvantages could be of the devaluation of the national currency that would naturally follow Italy’s exit from the euro. Thirdly, we need to assess how high the costs (both economic and political) would be of Italy’s unilateral exit from the euro.

I propose starting with the first subject, because it is the most important. If monetary independence is not beneficial for Italy, it is difficult to justify an exit from the euro on the basis of a temporary advantage. Vice versa, if significant benefits exist in having one's own national currency, it is difficult to justify Italy remaining in the euro purely on the basis of the costs of a transition.

John Cochrane, Senior Fellow at the Hoover Institution of Stanford University, has kindly agreed to open the debate in the coming days. I very much hope others will follow.

Please send your proposals and expert contributions via mail to and