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CURRENCY

The lira is still being used in Italy – by the mafia

The Italian government's plan to introduce a new type of currency isn't likely to become reality any time soon. But it turns out the country already has another currency in circulation: the old lira.

The lira is still being used in Italy - by the mafia
The Italian lira has not been legal tender since 2002. Photo: AFP

Organised criminals are using the former currency for illicit transactions, according to one senior Italian police officer, despite the Italian lira not being legal tender since 2002 when Italy joined the euro.

“We still discover big amounts of liras,” Giuseppe Arbore, a deputy in the Guardia di Finanza, Italy's financial police, told parliament on Thursday. “Italian liras still constitute parts of illicit transactions.’’

The old Italian lira. Photo: Depositphotos

His comments reportedly amazed lawmakers at the Senate Finance Committee, where he was testifying on a government bill aimed at simplifying the tax system.

When pressed to provide examples, he said he couldn’t elaborate, citing ongoing investigations.

READ ALSO: What is Italy's flat tax and who would it benefit?

“When a banknote is accepted by an organization internally, even if it is outside the law as a legal value, it can settle transactions,’’ he said. “We are obviously talking about illicit organizations.’’

It's unclear how, or even if, the money is eventually exchanged for euros.

The revelation comes following intense government debate on the viability of creating a secondary currency.

League party ministers including Matteo Salvini, Italy's co-deputy prime minister, said they want to use to use “small denomination government bonds,” known as “minibots”, for domestic transactions within Italy, but the measure is strongly opposed by many within the fractured coalition government, including Finance Minister Giovanni Tria.

The risk that the notes could be used for illegal trade was among the reasons listed by opponents of the idea.

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EUROPEAN UNION

France, Germany, Spain and Italy to sidestep Hungary on global tax plan

Germany, France, Spain, Italy and the Netherlands said Friday they would implement an international minimum tax on big corporations, sidestepping Hungary's opposition to an EU-wide plan.

France, Germany, Spain and Italy to sidestep Hungary on global tax plan

The decision by the top European economies effectively ends months of effort to implement the tax jointly across all 27 member states.

The 15-percent minimum tax was one of two pillars of a major international agreement decided at the OECD and signed by more than 130 countries, including Hungary and the United States.

“Should unanimity not be reached in the next weeks, our governments are fully determined to follow through on our commitment,” the countries said in a joint statement.

“We stand ready to implement the global minimum effective taxation in 2023 and by any possible legal means,” the countries added.

French Finance Minister Bruno Le Maire, who initiated the joint text, said that “tax justice must be a priority for the European Union”.

“We will put in place minimum taxation from 2023, either through the European route or through the national route,” said Le Maire.

Christian Lindner, his German counterpart, said Germany will “if necessary” adopt the tax “independently of an agreement at the European level”.

The EU’s original ambition was that the 27-member bloc would be the first jurisdiction to implement the OECD-brokered agreement. The bloc-wide plan needed the vote of all EU countries in order to pass.

The resistance by Hungary came as the relationship with its EU partners remained fraught, with Budapest along with Warsaw seen as steering away from the bloc’s democratic values.

The Hungarian veto of the minimum tax is seen by many in Brussels as a means of pressure to obtain the release of seven billion euros ($7.3 billion) in grants planned under the European pandemic recovery plan.

Poland’s acceptance of the minimum tax came after Brussels accepted Warsaw’s recovery plan, which should see it receive 36 billion euros in grants and loans over the next several years.

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