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10/12/2016

Italy vows to use presidency to change Europe

EU Priorities 2020

Italy vows to use presidency to change Europe

Matteo Renzi. Rome, 28 April. [Palazzo Chigi/Flickr]

Days before Italy assumes the presidency of the EU on 1 July, the country’s top man in Brussels said his government will push a reform agenda, starting with an aggressive plan for investment to reinvigorate the bloc, and inject new blood into the anemic recovery.

“We need to continue the work done on fiscal consolidation and structural reforms. However, we are missing a specific policy line to underpin investments growth in the EU,” Italy’s permanent representative in Brussels told EurActiv in an exclusive interview.

Pragmatic ambition

Even though Italian Prime Minister Matteo Renzi will only present the Presidency programme on 2 July at the first session of the new European Parliament in Strasbourg, insiders expect a minimalist agenda, centred around growth.

“If you look at the needs of the EU in certain areas, especially energy, security, energy efficiency and broadband you have a number of areas where money could be invested,” the top diplomat said, noting that the ‘pragmatic ambition’ is to pull together money that exists already from the European Investment Bank and/or private capital.

Sannino told EurActiv  that the Italian Finance minister, Pier Carlo Padoan, has visited numerous European capitals to discuss the perfect investment plan, and he will present it at July’s Economic and Financial Affairs Council (ECOFIN).

According to the permanent representative, EU leaders are not divided on a significant programme on investment. “This is a win-win programme,” he said noting that once you create the right conditions for the stability and growth pact to be implemented naturally, there is no need to change the rules of the game.

Renzi has made it clear that he wants to see increased budget flexibility under EU rules, a condition for him to back Jean-Claude Juncker as the next European Commission president.

The Italian PM wants productive investments to be removed from deficit calculations. Padoan said earlier this month that reforms undertaken should be factored in the way budget deficits are calculated.

“If we go into the ideological debate about flexibility, then we are lost,” Sannino said, arguing for a new beginning, something Renzi has reportedly underlined in a paper on the new direction for the Union he has submitted to European Council President Herman Van Rompuy, who is drafting a policy blueprint outlining the priorities for the next five years.

In the same document Renzi, pushes for an ‘audacious and innovative’ President of the European Commission, who will be able to pave the way towards what he calls the United States of Europe.

>> Read also Italian PM vows to push for the United States of Europe during presidency

Change Italy to change Europe

Buoyed by the EU vote, Renzi knows he won the biggest mandate for an Italian government since the 1950s because he pushed a reform agenda. Now he needs to deliver on his promises, both at the national and the European level.

It is not about “just selling the story of business as usual, but rather a new way of doing things, starting in Italy and then applying the idea to Europe”.

Renzi has promised a raft of reforms to overhaul the eurozone’s third largest economy. He claims he needs more flexibility to spend more on investments to reignite the economy.

The International Monetary Fund last week called on Italy to take rapid steps to increase the country’s growth potential and cut debt.

“The recovery remains fragile and unemployment unacceptably high, highlighting the need for bold and quick policy actions,” the IMF said, noting the economy contracted by 0.1% in the first quarter after emerging at the end of 2013 from a two-year recession.

Two other pillars of the Italian presidency will be energy security and the creation of a coherent EU migration policy in light of the crisis in the Mediterranean. More than 50,000 people have arrived in Italy by boat this year. 

Background

Italy will take over the presidency of the EU on 1 July. The handover from Greece takes place at a delicate time when the EU is shaping the new political infrastructure in the aftermath of the elections held in the end of May.

The last time that Italy has served in that role was in 2003, when, under the Berlusconi Government, the Intergovernmental Conference on the draft of the Constitutional Treaty was held in Rome. Previously, the Presidency under the Craxi Government, in 1985, has anticipated the European enlargement process to Spain and Portugal, while the one under the Andreotti Government in 1990 has blazed the trail to the Political and Monetary Union. Eventually, the 1996 Presidency was inaugurated by the leadership of Dini and closed under the Prodi Government: it was characterized by the march towards Euro for Italy and the other States  joining the common currency.

 

Timeline

  • 1 July: Italy to take over the presidency of the EU until December