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Italy’s Grillo suggests a euro-exit – an “Italeave”

Beppe Grillo, who lead Italy’s 5 Star Movement, suggested that Italy may leave the euro-zone. Grillo said his country, the euro-zone’s third largest economy should renegotiate the 2 trillion euro debt (127% of GDP).

While saying that he is a “big fan of Europe”, he slipped in a call for a non-binding referendum on the euro that would be held on the internet. With 26% of votes for the lower house, Grillo is listened to, and his comments could weigh on the euro.

He already said anti-euro comments in the past, but he was disregarded by the mainstream media. After the big swing in the February 24-25 elections, and potentially new elections in Italy in June, this statement is also of interest about the potential threshold for such an exit (emphasis mine):

Right now we are being crushed, not by the euro, but by our debt. When the interest payments reach €100 billion a year, we’re dead. There’s no alternative …  In six months, we will no longer be able to pay pensions and the wages of public employees.

Unless Berlusconi and Bersani form a left-right government, the key to a new government is in the hands of Grillo. The Italian upper house is practically deadlocked.

EUR/USD managed to recapture the 1.30 line after bouncing at support at 1.2960. This week could see a new downfall, due to these words and due to another Italian, Mario Draghi, head of the ECB.

For technical lines and events, see the Euro to USD forecast.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.