James Thomas, regional director, Lloyds TSB Financial Markets, looks at whether the Italians could be the first EU country to pull out of the euro, making it even more unlikely the UK will ever join...
Latest figures show Italian GDP expanded by 0.7 per cent, pulling the economy out of recession in the second quarter of the year.
This was the fastest pace for growth for more than four years and was underpinned by higher exports on the back of a weak euro.
This may temporarily quieten calls for a return of the lira in Italy and speculation they may quit the euro.
However prospects for the economy still remain bleak and with elections looming in May 2006, the calls for removal are bound to get louder.
Nevertheless it is extremely unlikely that the Italians would embark on such a move despite increasingly bitter criticism of the euro by the country's politicians.
Financial markets' reaction to recent Italian criticism of the euro has been relatively muted, especially compared to that at the time of the French and Dutch "No" votes to the new European constitution, both of which seriously weakened the euro against sterling and the dollar.
A leading euro critic has been Italian premier Silvio Berlusconi, who recently labelled the currency a " disaster" - and another wellknown minister has gone even further, by publicly calling for the restoration of the lira.
The anti-euro criticism has surfaced because the single currency is being blamed for the poor state of the Italian economy, which has suffered the indignity of being downgraded by global credit rating agency Standard and Poors.
And even though the latest quarterly growth figures reveal that the country has pulled out of recession, the outlook for the Italian economy remains bleak.
There is no doubt that it faces some very fundamental problems. But re-introducing a devalued lira will not help at all.
Being in the euro has brought them many benefits, one of which is that the issue of debt is a lot cheaper, crucial given their worrying fiscal position.
Their argument is that they came in at a too highly valued exchange rate - but to leave now would be a very long winded process and one which would leave Italy facing an even more challenging outlook in the view of most investors.
There is no mechanism to leave the euro and no-one has any idea how the market would react to someone doing so. All that is certain is that a reinstated lira would be worth an awful lot less than it originally was.
So they can't keep thinking "we could have the lira at what it was" - it is just far too simplistic.
I believe recent anti-euro statements from Berlusconi were merely posturing ahead of next year's Italian elections, where he faces up against Romano Prodi, who introduced the euro into Italy.
If the Berlusconi regime was ousted at the election by a government led by the pro-European, as is a possibility, the debate about the future of the euro in Italy could quickly disappear.
If that happens, the Italians might also become more reform minded and start to tackle the more structural issues facing the economy.
The euro has been mounting a recovery and bond yields have also risen, reflecting confidence flooding back into the European economy. We believe that the euro is poised to strengthen further over the medium-term, as euro zone economic growth is more balanced than the UK, which faces an increasingly large structural trade deficit and growing concern over its fiscal accounts.
However, the problem we saw with the "No" votes has not gone away, as the matter of the European constitution has not been resolved. So the euro jitters could quickly re-emerge once the European Commission again decides to move ahead with its plans for the new constitution.