A junior partner in Italy's four- party government stepped up its campaign to pull out of the euro yesterday, a move more mainstream politicians have dismissed as a populist hunt for votes ahead of a general election next year.
The Northern League party reiterated its call to drop the "failed" euro, and vowed to campaign for a referendum on pulling out of the currency.
"We can also imagine a new currency, let's call it Lira with a capital L, pegged to the dollar," Reforms Minister Roberto Calderoli told la Repubblica newspaper.
"We are studying with economists and experts in European law on how to proceed."
The euro fell briefly on Friday after Italian Welfare Minister Roberto Maroni announced the League's anti-euro stance.
Foreign Minister and Deputy Prime Minister Gianfranco Fini, head of the much larger National Alliance party, later on Friday said that Mr Maroni's proposal was not government policy and was "lacking any political credibility".
Italy's President Carlo Azeglio Ciampi, who usually remains above the cut and thrust of party politics, made a barbed assault on euro-scepticism which has been given a boost by the votes against the EU constitution in France and the Netherlands.
"You don't turn back and surrender in the face of difficulties, you surmount the obstacles with renewed vigour. You do not put in jeopardy the heritage we have built up, you work to strengthen it," President Ciampi said on Saturday.
The League's Mr Calderoli hit back at the weekend, saying President Ciampi, a former prime minister, finance minister and central bank chief, was "one of the people which pushed our country to enter the euro at all costs. Today it's hard (for him) to accept defeat, but it does have to be accepted".
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