First euro victim as Italian foreign minister resigns and Italy's banks strike

ITALY: The Euro has claimed it first high-profile victim with the resignation of the Italian Foreign Minister, Mr Renato Ruggiero…

ITALY: The Euro has claimed it first high-profile victim with the resignation of the Italian Foreign Minister, Mr Renato Ruggiero.

The announcement came ahead of a nationwide bank strike today which threatens to plunge the new currency swapover into chaos, starving the country of badly needed cash.

The minister's resignation on Saturday night came at the end of a week marked by tensions within the centre-right government of the media tycoon Mr Silvio Berlusconi. The tensions ostensibly were prompted by the launch of the new single currency amid signs which suggest that the Berlusconi government is shifting Italian foreign policy away from its traditionally staunchly pro-EU stance.

The one-day bank stoppage was called in December as part of a dispute over a new work contract, and unions said the queues and confusion seen at banks during last week's euro launch had laid bare the sector's many problems. While the European Central Bank hailed the New Year launch of euro notes and coins as "a tremendous success" across the continent, Italy clearly struggled to adapt to the changeover.

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Mr Ruggiero, a former head of the World Trade Organisation, had expressed his dismay last week at the hostile reaction of at least three senior cabinet colleagues to the launch of the euro. The Defence Minister, Mr Antonio Martino, had suggested that the euro experience "could end in failure", the Economy Minister, Mr Giulio Tremonti, belittled "primates waving banners", while the Devolution Minister and Northern League leader, Mr Umberto Bossi, told reporters that he "couldn't give a damn about the euro".

Rather than reprimanding the euro-sceptical ministers, Mr Berlusconi's response to Mr Ruggiero's complaints was to tell the Rome daily La Repubblica that he himself was responsible for Italy's foreign policy while Mr Ruggiero was "merely a technocrat".

Following such a humiliating put-down, Mr Ruggiero was left with little option but to resign.

Mr Ruggiero, who is not a member of any party in the centre-right coalition, had been strongly "sponsored" for the role of Foreign Minister by the former Fiat president Mr Gianni Agnelli when the new government was being formed last spring.

Many commentators argued his presence gave the Berlusconi government badly needed international credibility.

While recent differences about the euro may have been the final straw, Mr Ruggiero's short tenure at the Foreign Ministry had already been marked by differences on major foreign policy issues, including Italian participation in the European "Airbus" defence project, Italy's refusal to ratify a fast-track, Europe-wide arrest warrant and Italy's claims at last month's EU summit in Laeken for a larger share of the new EU institutions due to be created.

Although the Italian government played down the significance of the Ruggiero resignation, pointing out that it had been a "divorce of mutual consent", opposition figures, European partners and the President of the European Commission, Mr Romano Prodi, expressed their disappointment.

"I am surprised, disappointed and above all very struck by this resignation," said Mr Prodi. "I don't want to interfere in the internal affairs of my country. But what I can say is that when Renato Ruggiero stood up to speak at the General Affairs Council, all the other 14 ministers listened to him in religious silence."

The French Foreign Minister, Mr Hubert Védrine, was another to express regret. "I deeply regret the departure of Renato Ruggiero with whom I had a very trusting relationship."

Last night, Mr Berlusconi assumed the Foreign Minister's office on an interim basis until a new appointment can be made. When he finally takes office, the new minister is sure to be met with some anxious inquiries from European partners about the implications of Mr Ruggiero's resignation for Italy's EU policy.