MNI INTERVIEW: No Italy Eurexit, Euro Not Irreversible: Borghi

--However, EZ States Looking To Leave Euro Must Be Able To Do So "Orderly"

--EZ Governance Reform Remains Crucial: Lega Spox

--Idea Germany Could One Day Leave Euro Not "Farfetched"

By Silvia Marchetti

     ROME (MNI) - Italy's government has no intention of seeking a euro exit,

but the single currency is not irreversible and member states willing to leave

the bloc must be able to do so in an orderly fashion, Claudio Borghi, Lega's

spokesman for economic affairs, told MNI.

     Borghi, president of the Lower House's Budget Committee, argued that the

eurozone's governance badly needed a "restyle" to allow any member country to be

free to opt for a "smooth" euro exit without disrupting market stability.

     "Nowhere in our joint ruling contract with the 5 Star Movement is euro exit

an objective. Having said that however, the single currency is not untouchable

and, if a state wants to abandon it, it must be able to do so in a orderly, in a

clear way without any obstacles."

     Borghi, despite personally being against the euro, is attempting to soothe

revamped fears that Italy's new government cabinet may be aiming to abandon the

euro club, following a resurgence of mixed messages coming from different

government members.

     --EXIT 'FAKE NEWS'

     "Everyone knows very well what my opinion has always been. I am against the

single currency, but an exit is not part of our mission. Italy wanting to leave

the euro is simply 'fake news' being fed to markets to boost volatility and

spike the spread in yield between Italian and German bonds," he added.

     But he underlined that a theoretical exit from the single currency should

not be a taboo.

     "What is crucial is that if any member state ever expresses the desire to

leave the euro, that it can do so in a tranquil way, without having its decision

cause havoc and trigger a wave of instability across the whole bloc. That's

all," Borghi said.

     He stressed that it was one thing pushing for the overhaul of all European

treaties, including the Stability and Growth Pact, but another advocating for an

exit from the euro zone, which is not Rome's ultimate goal.

     --CONTINGENCY PLANNING

     Nonetheless, he argued, all countries need to have a detailed plan at hand

to ease a potential exit from the euro club if needed, just like any company

keeps and updates contingency plans for emergencies.

     "There is nothing wrong in having such a plan to tackle risks," said

Borghi.

     The Rome government's euro stance has been sedated by recent polls

suggesting the majority of Italian voters are against ditching the euro, with

three out of four wishing to stick to the single currency.

     In Borghi's view, there could be a major surprise one day from

traditionally pro-European countries such as Germany, that could in future opt

for an orderly euro exit to release itself from the burdens of risk-sharing,

saying it would not be such a "farfetched scenario".

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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