EU shoots down Berlusconi parallel currency proposal

Former Italian Prime Minister Silvio Berlusconi arrives ahead of a memorial ceremony in honour of late former German Chancellor Helmut Kohl, at the European Parliament in Strasbourg, France, July 1, 2017. REUTERS/Arnd Wiegmann/File Photo

BRUSSELS (Reuters) - The European Commission on Wednesday rebuffed the idea of a parallel currency put forward by former Italian prime minister Silvio Berlusconi.

It said there was only one legal currency within the euro zone.

“There are no exceptions to this rule,” a Commision spokesman said, replying to a request for a comment on the proposal.

Berlusconi, who leads the centre-right Forza Italia party, indicated his support for the introduction of a parallel currency in Italy in a newspaper interview over the weekend.

The proposal highlights concerns about broader anti-euro sentiment in Italy, the euro zone’s third biggest economy, as it heads into elections due by May next year.

Italy has two parties that are critical of the euro and European Union, the 5-Star Movement and Lega Nord. Any combination with Forza Italia could create a parliamentary majority.

On Tuesday Italian government bond yields jumped to stretch the gap with German peers to a five-week high, with analysts citing the proposal as the cause of the sell-off.

Reporting by Julia Fioretti, writing by Stephen Jewkes Editing by Jeremy Gaunt