Italian call for lira return rocks euro

SHUDDERS swept through the City today after an Italian minister said the country should consider quitting the euro and reintroducing the lira.

Welfare minister Roberto Maroni, a member of the eurosceptic Northern League party, told La Repubblica newspaper that Italy should hold a referendum to decide whether to return to the lira.

He blamed European Central Bank president Jean-Claude Trichet for being among those chiefly responsible for the 'disaster of the euro'.

The comments follow reports that top German officials have examined the possible collapse of the single currency at a secret meeting in Berlin.

The euro dived three-quarters of a cent against the dollar on Maroni's remarks before clawing back most of it.

'The Northern League are nutters,' said Julian Jessop, chief international economist at Capital Economics. 'They want to separate from Italy, let alone the eurozone.'

Mark Wall, European economist at Deutsche Bank, said: 'Europe is gripped with uncertainty.' He added that the chances of the euro breaking down are still 'incredibly small'.