Italy will be a prime beneficiary of the European Union’s (EU) complete currency switch to the euro, beginning Jan. 1, and the conversion is expected to facilitate trade between Georgia and the EU, according to Francesco Lovecchio, finance attaché at the Italian Embassy in Washington.
The conversion will “put our houses in order and give Italy, as well as the EU generally, the flexibility to cope with lack of homogeneity in our economies,” Mr. Lovecchio told GlobalFax in an interview prior to a presentation at Capital City Club luncheon, Nov. 30. He was here with a delegation of 12 economic and financial counselors (ECOFIN) representing EU member states.
“The conversion to the euro is for the U.S.’s own good because U.S. companies will have better opportunities to export to the EU,” Mr. Lovecchio said prior to a presentation at the luncheon sponsored by the Atlanta Council on International Relations (ACIR).
Improved financial conditions generally, discipline in fiscal policy, more attention to the public deficit and sound economic policies are long term results of the EU’s use of euros rather than separate currencies, he said, because a single currency signifies unity and stability in the region.
Italy, he noted, had both the richest and the poorest regions in the EU at the time the European Monetary Union (EMU) formed in 1993. Italy’s membership in the EMU and its use of the euro beginning in January 1999 has since brought the southern, less developed region closer to economic parity with the northern, industrial region, as well as curbed inflation and stabilized the economy in general, he said. Italy’s interest rates have dropped some 4% on the average since 1996, and its inflation has dropped from 3% to 2% since 1999.
The introduction of the euro as the official currency will lower interest rates in each EU member country, equalize interest rates among countries and increase competition among EU nations, thus lowering prices, he added.
“What is good for the EU is good for the U.S. and Georgia,” Jan Willem van den Wall Bake, finance counselor from the Dutch Embassy in Washington, said during the presentation. He noted that price stabilization resulting from the use of a single currency would make for a stronger consumer market in Europe.
Georgia companies may have an easier time choosing where to locate operations in the EU because they will make investment decisions based on where they will have the best market penetration, rather than on wide differences among pricing policies among countries, he added.
Contact Francesca Bianchi at (404) 832-5560 ext. 11 for more information.