EU shoots down Berlusconi parallel currency proposal

BRUSSELS - 23 August 2017: The European Commission on Wednesday rebuffed the idea of a parallel currency put forward by former Italian prime minister Silvio Berlusconi.

It said there was only one legal currency within the euro zone.

"There are no exceptions to this rule," a Commision spokesman said, replying to a request for a comment on the proposal.

Berlusconi, who leads the centre-right Forza Italia party, indicated his support for the introduction of a parallel currency in Italy in a newspaper interview over the weekend.

The proposal highlights concerns about broader anti-euro sentiment in Italy, the euro zone's third biggest economy, as it heads into elections due by May next year.

Italy has two parties that are critical of the euro and European Union, the 5-Star Movement and Lega Nord. Any combination with Forza Italia could create a parliamentary majority.

On Tuesday Italian government bond yields jumped to stretch the gap with German peers to a five-week high, with analysts citing the proposal as the cause of the sell-off.