Last week Matteo Salvini, one of the leading candidates to become Italy’s next leader, revealed his party Lega is already working on a backup plan to quit the eurozone if the country’s demands for reform are not met by Brussels.
The eurosceptic politician has long criticised Italy’s adoption of the euro, calling it a “wrong currency and a wrong choice”, and claiming the euro has a damaging impact on the country’s economy.
Clemens Fuest, President of the IFO Institute for Economic Research, along with predecessor Hans-Werner Sinn and Chairman of the Council of Economic Experts Christoph Schmidt, claim an exit clause is necessary because some countries do not respect the rules.
Speaking to Milan-based daily Corriere della Sera, Mr Fuest said: “I said the eurozone needs an exit clause, not just for Germany, but potentially for every country.
“The result of the Italian elections reminds us that some national governments could refuse to honour the agreements that their predecessors had signed.
“Recently, Matteo Salvini said that Italy’s fiscal policy should do exactly the opposite of what Brussels is asking for, and he could be the next President of the Council.
“If he does what he says, he questions Italy’s participation in the eurozone.
“The eurozone can survive only if the countries accept the principles on which it is based – if you are not in a position to agree on those principles, then it is better to remain friends, but having different currencies.”
In the Italian elections earlier this month, anti-EU Lega saw its share of the vote rise from four percent in 2013 to 18 percent, but it did not produce a clear winner as a majority of 40 percent of the votes was needed to form a new government.
The centre-right coalition between Mr Salvini, Silvio Berlusconi and Giorgia Meloni came closest with 37 percent of the votes.
Mr Savini said: “We plan to sit down politely and responsibly to a table asking to change some of the rules regulating our membership of the European Union, which are heavily damaging the lives of Italians.”
The Lega Nord leader added his party is considering reforming Italy’s Constitution in order to legalise a referendum on the euro – and possible membership of the European Union.
The German economist explained Article 50 of the Lisbon Treaty already acts as an exit clause for the euro but Mr Fuest said this is not optimal because it implies a country wishing to leave the euro must also exit the European Union.
Mr Fuest said: “We need a mechanism with two results: first to allow a country to leave the euro but to remain in the EU; second not to encourage the exit but if it happens, it should at least offer a procedure that avoids conflicts and minimises costs for everyone.
“A clause of that kind would not destabilise the eurozone.”
Mr Fuest admitted leaving a monetary union would be complicated, with substantial economic and political risks, but no country would make an exit unless the nation has serious reasons to do so.