After being severely admonished by French President Nicolas Sarkozy and German Chancellor Angela Merkel at a summit on Sunday, Berlusconi issued a statement saying that nobody in the EU had the right to nominate himself commissioner and teach lessons to other governments.
Berlusconi also hit back at France and Germany, hinting that the real cause of the euro crisis wasn't Italian overspending, but the greed of their banks.
"In what refers to the turbulences of sovereign debt and the bank crisis, in particular the French-German one, we have firm positions which we will outline at the next EU Council," Berlusconi said.
The statements appear as a bad sign ahead of tomorrow's summit of the EU heads of state and government, followed by a summit of the 17 eurozone countries. In particular, the meeting is expected to boost the firepower of the EU bailout mechanism EFSF, to the tune of €1 trillion. This is expected to appease markets which are increasingly nervous over the situation of Italy, a country with a debt of €1.84 trillion, which would need €600 million in case of a bailout.
According to the French Daily Le Monde, a so-called "euro working group," consisting of high officials of the eurozone countries, is at present trying to put in place a proposal for a new financial instrument, aimed at supporting Italy. This fund would buy Italian sovereign debt at the secondary market, keeping the interest rates relatively low. Up to now, the European Central Bank has been doing just that, but after German objections, it became clear that this could not go on indefinitely.
The European Commission insisted that Italy should stick to its commitments over austerity, pension reform and an overhaul of its weak judiciary system. Commission spokesperson Amadeu Altafaj said yesterday that Italy's partners needed to be reassured, and the best way would be to adopt a strict calendar for implementing these reforms.
Problems at home
Back from Brussels, Belusconi yesterday canceled a court appearance over the Mills case, in which he is accused of bribing a lawyer to lie in his interest, and called a cabinet meeting, indicating that he would be ready to raise the retirement age to 67 from 65 for most public- and private-sector workers. However, his key partner the Northern League, without which Berlusconi has no majority in Parliament, remains staunchly opposed to the measure.
"There is in Italy a political leadership problem that doesn't exist in Spain," Le Monde quoted an unnamed diplomatic source as saying.
Indeed, Sarkozy has made clear that Spain, previously considered to be in a similar situation to Italy, had made great progress. "Thanks to the efforts of [Prime Minister] Zapatero, and thanks to the sense of responsibility of the Spanish opposition of Mr Mariano Rajoy, Spain is no longer on the first line," he said.
However, the Italian press is highly critical of the attitude of Sarkozy towards Berlusconi at his joint press conference with Merkel.
Asked if the Italian leader had given new assurances that economic reforms would be carried out, and if he was reassured after talking to him, Sarkozy grinned and remained silent, raising laughter amongst assembled journalists.
"We were together in this meeting," he said, pausing before adding: "As we say, we trust the sense of responsibility of the Italian political, financial and economic authorities."
Even the opposition, for once, sided with Berlusconi.
“I didn’t like Sarkozy’s sarcastic smile,” Pier Ferdinando Casini, the head of the opposition UDC party, was quoted as saying.
