U.S. Markets

Italy's Northern League chief attacks euro, says preparing exit

FLORENCE, Italy (Reuters) - The leader of Italy’s right-wing Northern League said on Wednesday his party was preparing the ground to leave the euro zone and called the euro a “German currency” which had damaged Italy’s economy.

FILE PHOTO: Northern League leader Matteo Salvini gestures during the television talk show "Porta a Porta" in Rome, Italy, January 18, 2018. REUTERS/Remo Casilli

“It’s clear to everyone that the euro is a mistake for our economy,” Matteo Salvini told reporters on the sidelines of a rally in Florence ahead of the March 4 parliamentary election.

The eurosceptic League is a key member of the center-right coalition which polls suggest will win most seats at the election, but probably fall short of a working majority.

Salvini, who last month presented two prominent anti-euro economists among the League’s candidates, said it was only a matter of time before the euro collapsed and that he was “preparing an emergency exit for the Italians.”

“We don’t have a euro in our pockets. We have a German mark which they called the euro,” he said.

The League is polling at around 14 percent, according to two surveys released this week, around two points behind its main coalition ally Forza Italia (Go Italy!) led by former prime minister Silvio Berlusconi..

The two leaders have agreed that if the center-right bloc wins the election, whichever party gets more votes will choose the prime minister and set the policy agenda.

Berlusconi, who wants Italy to remain in the euro zone, is barred from office because of a 2013 tax fraud conviction and has not yet proposed a candidate for prime minister, while Salvini says that if the League comes first he will be premier.

The two parties also disagree on fiscal policy.

The League on Tuesday released its election program saying Italy should leave the European Union unless the fiscal rules set out in the Maastricht treaty which prepared the ground for the single currency were scrapped.

“We want to remain in the EU only if we can renegotiate all the treaties which limit our full and legitimate sovereignty, in practical terms returning to the European Economic Union which preceded the Maastricht Treaty,” the program says.

Berlusconi says Italy should respect the EU’s budget deficit ceiling of 3 percent of gross domestic product.

Each party in the center-right bloc, which includes the small, far-right Brothers of Italy party, has issued its own election program, and the coalition has also published a vaguer, joint program containing points they all agree on.

Writing by Gavin Jones; Editing by Richard Balmforth