● The introduction of euro in Italy has caused different reactions. There are two current public opinions on euro: the first one claims that euro is the cause of all Italian economic problems, the second one that EU political system relies on euro. We are looking for a scientific assessment of euro. First of all we have to ask: what is euro? How does economy work? Which are the concordats that lead the EU economic system? The first step is looking more closely to the Italian economic history. We will deal with these questions with an historical approach. Euro Co-finanziato Dal Programma LLP dell’Unione Europea L’autore è il solo responsabile di questa comunicazione. L’Unione europea declina ogni responsabilità sull’uso che potrà essere fatto delle informazioni in essa contenute.

● The public debt – the public debt is a value that countries must pay for those who have previously created it. ● Why was euro created? Euro is an instrument of politics created at the the begining of the 20th century to manage the globalization that involved all European countries. ● Inflation - inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money. Key notions

What is the European system of central banks? The European system of central banks is composed of the European Central Bank (ECB) and the national central banks (NCBs) of all 28 European Union (EU) Member States. In accordance with the treaty establishing the European Community and the Statute of the European System of Central Banks and of the European Central Bank, the primary objective of the Eurosystem is to maintain price stability. Without prejudice to this objective, the Eurosystem shall support the general economic policies in the Community and act in accordance with the principles of an open market economy. Maastricht Treaty - The treaty led to the creation of euro. One of the obligations of the treaty for the members was to keep "sound fiscal policies, with debt limited to 60% of GDP (Gross Domestic Production) and annual deficits no greater than 3% of GDP."The treaty also created what was commonly referred to as the pillar structure of the European Union, the European Community pillar, the Common Foreign and Security Policy and the Justice and Home Affairs.

The Italian crisis and the euro ● The data show us that Italy is the only country whose Gross Domestic Product decreased after the country joined the single European currency. This fact shows that the Italian problem isn't the result of the introduction of euro and we can reach this conclusion by analising the Italian economic system in the past. When Italy entered EU it was in a bad condition: the public debt was high and a not very strong industry could not work within a global economy.

Italian Economy ● The data show us the productivity of Germany (blue) and the productivity of Italy (red) and the pay of German and Italian workers. This graphic shows us the gap beetween how much a worker produces and how much he is paid in Italy. The causes are mainly the strong role played by trade unions in Italy that makes salaries static. In a shallow vision it is good but we have to take it into account if we have the possbiility to do that. It is a start for the inflation.

● China entered global commerce around 2009 and it soon started to change the world economic environment. China was an emergent country and many products costed less because labor force was cheaper and there were no trade unions to defend human rights. The process of crisis started when China big factories owners became rich and decided to invest their money and protect it. They invested in euros and dollars that are a safer currency. Banks became richer and started to advise people to invest in packages of values and they also started to give loan to buy houses, often to people who could not pay back. The situation made the people give their houses backs. Banks tried to sell them but the low purchasing power of the people stopped house trade. The values of houses went down because of a high supply and a low demand. All these investiments resulted in a total failure. In this global economic environment the European Central Bank played a main role helping banks by giving them money to avoid bankruptcy. The 2009's Crisis

These data show us the effects of China on prices and productivity

Acknowledgments and Bibliography We thank Dott Tommaso Sonno for his support and guide Bibliography : «L’Italia alla Sfida dell’Euro» di Altomonte Carlo, Sonno Tommaso