World Business: Shortchanged

Italy may be prosperous, but it is also almost penniless—thanks mostly to a coin shortage that has put small-change business transactions on a barter basis.

Most popular (and hardest to find) coin is the 500-lire piece, worth 80¢ in U.S. terms. Only last year, the government issued 5,000,000 new 500-lire coins commemorating the 700th anniversary of Dante’s birth. Today the Dante coins have just about disappeared —except on the black market, where they bring as much as $4.80. For many Italian bank clerks, the first order of daily business is to roam the streets trying to scrounge coins from train stations and stores in return for bills; some banks are issuing 500-lire cashier’s checks that pass from pocket to pocket as legal tender. Several big department stores offer scrip instead of change, and grocers often make change in the form of potatoes or pieces of chocolate. Milan’s San Siro race track pays off in scrip—good only at the track—and customers at Sorrento’s Fauno Bar have been reduced to writing checks so as to tip the waiters. Inevitably, there have been floods of funny money: in Bologna, one trail of fake cashier’s checks led to a ring of clumsy counterfeiters who made the mistake of misspelling the bank’s name.

Why the coin shortage? Treasury Minister Emilio Colombo blames it mostly on the increasing number of vending machines and on foreign tourists who, whether souvenir collecting or through negligence, leave the country with pockets ajangle with lire. The worst offender is undoubtedly the ordinary Italian. Still not confident about the long-range future of his country’s economy, he is hoarding coins against the day when paper money loses its value. As one result, the piggy bank has become one of the hottest items in Italian stores.