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Giovanni Tria, Italy's pro-euro finance minister

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Giovanni Tria, Italy's pro-euro finance minister
Giovanni Tria is sworn in as Italy's new finance minister. Photo: Francesco Ammendola/Italian Presidency Press Office/AFP
19:07 CEST+02:00
Italy's new finance minister Giovanni Tria is a political economy professor whose policies dovetail with those of the far-right League party, with one crucial exception: he wants Italy to stick with the euro.

This is an important distinction from Paolo Savona who was previously touted for the job and whose hostility to Italy's eurozone membership turned out to be a dealbreaker for Italy's president.

But although Tria wrote on the Formiche analysis website that it was "not in our interests to leave", he also said that the eurozone needed to be reformed.

"Before saying why I think that we must reply 'no' to the question of a euro exit, I would start from the question 'what are the conditions for the euro's survival', so we can move in the opposite direction of any breakup," Tria said.

Some financial market analysts understood this to be a warning that Italy's support of the eurozone will be conditional on more flexibility, including the possibility of revising the regime of fixed exchange rates that is at the  heart of the single currency.

Michael Hewson, chief market analyst at CMC Markets, said Tria was warning "of an implosion of the euro if it isn't reformed", adding that this meant "future relations with Brussels are likely to be much more prickly than previous administrations'".

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But there was still relief Friday in Europe's financial markets, where investors welcomed Tria's appointment and the Italian coalition deal. Milan's stock market index surged more than 2.5 percent and the euro rose
against the dollar.

"The euro was thrown a lifeline," said Lukman Otunuga, an analyst at FXTM.

Carlo Cotterelli, the former IMF official charged with forming a caretaker government before stepping aside to allow Guiseppe Conte to become prime minister, said he had great respect for Tria.

"He will have to reconcile the need to cut the public debt with demands to implement a number of things that were promised" in the Five Star-League platform, Cottarelli told Italian radio Friday. "It's not going to be easy," he said.

On fiscal issues, Tria said he is in favour of a two-band taxation system that the two anti-establishment coalition partners, the Five Star Movement and the League, call a "flat tax". Tria said that "what matters is beginning the simplification process" of Italy's fiscal system".

Ultimately, however, a successful tax system "does not depend on whether there is one tax band or two, but on the amount of the taxation you bring in", said Tria, who would like a higher VAT rate.

The new finance minister is, however, more critical of the basic monthly income that Five Star made a key manifesto pledges.

READ ALSO: Here are the key proposals from the M5S-League government programme

"We do not yet know what this citizenship income will be, nor the resources it will require or the number of people involved," he wrote.

There was a danger, he said, that Italy will become "a society in which one part of the population [the wealthy north] produces and the other [the impoverished south] consumes".

Tria was born in Rome in September 1948. A lawyer by training, he is president of the National School of Administration and teaches political economy at the Italian capital's Tor Vergata University.

Tria is interested in issues related to development, and has acted as an advisor for the World Bank. He has also been the Italian delegate to the board of directors of the International Labour Office (ILO).

His recent research focuses on the economics of justice and crime, the role of institutions in the economy, and international migration and development. He has carried out research periods at major institutions including Columbia University in New York, and Simon Fraser University in Vancouver. 

READ ALSO: Here is Italy's new cabinet in full


Photo: Italian Presidency Press Office/AFP
 

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