Italian euros?

Telegraph reports In an article about the problems of the euro, the German magazine Stern advised readers to check their euro banknotes. The notes issued in Germany, it explained, begin their serial numbers with "X"; those issued in Italy begin with "S". Hold on to the former, was the suggestion, and get rid of the latter while you can. Stern's X-factor advice was based on the idea that the euro zone might break up. When the euro began in 1999, it was glorious for Italy, Spain, Portugal and (prospectively) for Greece. Their interest rates halved. Boom followed. But those countries had not abolished their inflationary habits when they abolished their currency, and now they had lost their old remedy of devaluation. As a result, their competitiveness is collapsing. Italy's competitiveness against Germany has fallen by a quarter since 2000. Within the system today, all that Italy could do is to deflate, but in the resulting squeeze, revenues would fall, causing the deficit to explode. Real wages would have to be cut to compete with Germany. The politics would be horrible. An alternative would be for the European Central Bank to inflate from the present two per cent a year to, say, four or five per cent to rescue the Mediterranean spendthrifts. But if that happened, there would be revolt in Germany. That devout believer in sound money only sacrificed her beloved deutschmark and joined the euro to make European finances German, not to make German finances Italian. It is therefore beginning to cross German minds (and other northern European ones, as the Dutch referendum vote showed) that they might be better off outside the currency. Hence the need to scrutinise the banknotes.

I was not surprised when France and then the Dutch rejected the EU Constitution, but if countries are going to differentiate between Euros from one country vs another, the idea of European Union is rapidly on the decline