Roundup: Italy political groups float idea of possible parallel currency

by Eric J. Lyman

ROME, Dec. 17 (Xinhua) -- Some of Italy's leading opposition political figures have come out in favor of a complicated plan, which allegedly would create a new way to pay government obligations without adding to the country's debt and could, according to some media, open the door to Italy leaving the 19-nation eurozone.

The plan uses so-called Fiscal Credit Certificates, or CCFs, their Italian-language acronym. The Italian Treasury would issue the CCFs, which could be used by companies either as credits against future taxes or as an alternative way to pay bills. A company could decide, for example, to pay vendors or salaries with a combination of euros and CCFs or pay them back to the government in taxes.

If Italy became the first major industrialized country to use CCFs, the certificates could become a kind of currency in circulation parallel to the euro.

The anti-establishment Five-Star Movement and the separatist Northern League both favor economic strategies that employ the use of CCFs. Similarly, three-time former prime minister Silvio Berlusconi, also a billionaire media tycoon, has also said he is interested in exploring the possibility of issuing CCFs, though that view is not part of the official plank of Forza Italia, the political party Berlusconi founded and heads.

Of Italy's four largest political parties, only the center-left Democratic Party has aid it opposes the use of the certificates.

The use of CCFs is controversial because widespread use of the certificates could help make it easier for Italy to leave the eurozone. And that possibility emerges as Italian support for the European Union (EU) dips to near all-time lows.

A Pew Research Center poll released earlier this year showed that around 35 percent of Italians were in favor of Italy leaving the EU, tied with Greece for the second lowest level among the 28 EU member states (the EU has less support only in the U.K., which voted to leave the bloc last year). In addition, the Pew poll showed Italy is the only member state where support for the EU has measurably fallen since 2016.

"There are two main reasons a government might issue CCFs," Lorenzo Codogno, a consultant and former chief economist for the Italian Treasury, now a professor at the London School of Economics, told Xinhua. "One is as a first step toward Italy's leaving the eurozone, and the other is as a way to bypass fiscal rules. Neither one of them is a good idea."

Codogno said it would be "irresponsible" for Italy to use CCFs. "Advocates sell the idea by saying it would help spark economic growth without adding to the country's debt, but they would just be a way to hide the debt," he said. "Clearly, they would still be debt."

Gian Marco Committeri, a partner with the Studio Alonzo Committeri & Patner accounting firm, agreed that any plan to use CCFs would be flawed, especially given the lack of details available.

"Right now we don't know how much the CCFs would be worth, who they would be issued to, and under what conditions," Committeri said in an interview. "There are general problems with the idea, but we can't even evaluate the plan until somebody provides more details." Enditem