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Last Updated: Sunday, 21 December, 2003, 12:04 GMT
Berlusconi goes cool on the euro
Silvio Berlusconi
Silvio Berlusconi: Euro benefits not yet evident
Italian premier Silvio Berlusconi has said the European single currency has yet to deliver any economic benefits.

In an end-of-year press conference, Mr Berlusconi said the euro had "so far produced many negative effects."

He warned that the single currency's recent surge against the dollar was penalising Europe's economy.

And Mr Berlusconi even appeared to regret Italy's adoption of the euro, saying: "It was not something decided upon by this government."

However, when pressed, the Italian prime minister said he believed joining the eurozone had been the right decision.

"I support the decision to join the euro...but in the knowledge that the positive effects would come in the medium term, and that to start off with there would be negative consequences," he said.

Consumer costs

Mr Berlusconi's remarks are likely to strike a chord with many consumers in Italy, where the euro is widely blamed for a surge in prices since its introduction as a physical currency in January 2002.

Italian consumer groups say retailers took advantage of the currency changeover to round up prices, costing the average Italian household an extra 2,800 euros (1,960 ; $3,360) over the past two years.

These opportunistic price rises are thought to be one reason why Italy's inflation rate, at 2.5%, far exceeds the European average of 2.1%.

The introduction in 1997 of a special "euro-tax" designed to ensure that Italy complied with the criteria for euro membership did little to endear the currency to ordinary Italians.

Mr Berlusconi's comments come at a time when many European businesses are fretting over the impact of the euro's 19% rise against the value of the dollar this year, which threatens to price eurozone exports out of lucrative US markets.

The Italian prime minister acknowledged their concerns, saying the euro's rise was "hugely penalising the economies of all European countries."

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