Word: lire
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Dates: during 1970-1979
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Smuggling currency abroad has long been a national pastime for Italians. For nearly a decade they have been carting lire by the billions across the border, partly to evade domestic taxes and partly in response to better investment opportunities in other countries. Though aware of the illicit traffic, Italian governments have tolerated it as comparatively harmless in a thriving economy...
...recent months, the practice has not only risen to alarming proportions but has emerged as the symptom of a deep-seated economic malaise. Last year the illegal flight of lire rose to $2.25 billion, enough to wipe out the benefits of Italy's overall trade surplus and create a $1.37 billion balance of payments deficit. A winter wave of strikes cost many industries the equivalent of a month's production. The resulting wage increases (average: 15%) have been followed by rising prices...
Weak Governments. To a considerable degree, the outflow of lire also reflects Italy's political troubles. Last week President Giuseppe Saragat was seeking someone to try to form the country's 28th Cabinet since World War II, following the resignation of Premier Mariano Rumor. Progressively weaker governments have failed to grapple with the country's Byzantine state bureaucracy or to create an attractive climate for investors by, for instance, modernizing Italy's corporate laws. Investors avoid the Italian stock exchange, because manipulation by insiders is common and because disclosure of corporate revenues and profits is minimal...