Italy seeks new leadership role in Europe

  
Barroso and Renzi. 4 July, Rome. [Daniela Vincenti]

Rebuffing criticism in Germany that Rome is too slow to reform, Italian prime minister Matteo Renzi on Friday (4 July) reasserted that he is ready to stand up to critics and reclaim a leadership role in Europe.

“The German central banker has a task, and that is the pursuing of its statutory goals. The Bundesbank does not have among its tasks to take part in Italian politics,” Renzi said, slamming comments made on Thursday (3 July) by Bundesbank president Jens Weidmann, who criticised countries seeking flexibility with the Stability and Growth pact rules.

Presenting the Italian Presidency programme in Strasbourg earlier this week, Renzi was also attacked by centre-right EPP leader Manfred Weber, who said responsible leaders had to implement rules.

>> Renzi inspires in Strasbourg, but draws heat from critics

“It is a mistake to be obsessed only by fiscal stability,” Renzi said, adding that the pact is rightly called Stability and Growth. “Without stability there is no growth, and without growth there is no stability,” Renzi said, speaking to the press in Rome.

The prime minister reiterated that his party Partito Democratico won over 40% of the votes in the European elections last May, campaigning on a reform programme to cut debt and boost growth in Italy. “I won the elections by saying that the problem is not Germany, but Italy.”

Renzi insisted, however, that flexibility will not only be good for Italy, but for Europe as a whole. Presidency sources argued that reforms and investment, even if they were country-specific, could have spill over effects if they were implemented simultaneously across Europe.

Speaking to the press in Rome, the Italian prime minister announced that his government will carry out a "major restyling" in a 1,000-day reform programme starting in September. The programme will reform taxes, justice, the civil service, the Constitution, and the electoral law. Renzi vowed to make Italy simpler, which he said will make it stronger.

Foreign Minister Federica Mogherini and Economy Minister Pier Carlo Padoan on Friday denied there was a crisis with Germany over how to interpret the stability pact, and how much growth spending was allowed in EU treaties.

Renzi too dimissed any friction with the Chancellor, saying that he "greatly appreciated" Angela Merkel's clarification that her government's stance on flexibility was different from that of the Bundebank. He said he had an "excellent relationship" with the German Chancellor.

Change Italy to change Europe

Faced with a jobless rate of 12.6% at home and a public debt of more than 135% of Italy’s GDP, Renzi is trying to convince its partners that more money needs to be spent on public investment.

In a recent interview with EurActiv, Italian ambassador Stefano Sannino said that it is not “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".

>> Read more about the Italian presidency: Italy vows to use presidency to change Europe

Merkenzi in the making

As Italy takes over the EU’s six-month rotating presidency this week, and with the next commission not in place until October, Renzi could de facto define the agenda for the next five years.

Speaking on Italian radion, Mogherini said that Italy "is exercising a new European clout, which opens interesting possibilities". The important thing, she said, is to have "a direct line" with Berlin.       

With a weakening France, and an increasingly isolated Britain, Italy could reclaim a leadership role in Europe, remarked observers.

“In many ways – ideology, geography, policy – Mr Renzi is the perfect counterbalance to the soft hegemony of Angela Merkel. As they are both likely to stay in power for the foreseeable future, it is the entente between him and the German chancellor that is most likely to shape the new Europe,” writes Kalypso Nicolaidis, professor of international relations at Oxford, in an op-ed in the Financial Times.

“This “Merkenzi” alliance could be good news for both the EU and the UK. The EU needs pragmatic leaders who agree that there are no absolute answers to the question of whether it should do more or less Europe,” Nicolaidis added.

Renzi has spoken of the need for collective action on energy, infrastructure, climate and immigration. But he has also said that he is fed up with the EU acting like a “old boring aunt”.

Positions: 

Speaking in Rome, European Commission president Jose Manuel Barroso said: "We fully support the Italian Presidency, which has established a clear set of goals, that we very much welcome, namely the need for reform, both at home and in the European Union. And we need this new enthusiasm."

"An enthusiasm that, for example, yesterday, in the Quirinale, I saw from President Napolitano. (…)  And Italy, as a founding member, has this kind of passion for Europe. I saw it in the Prime Minister Renzi's speech some days ago in Strasbourg in the European Parliament and there was the same enthusiasm, the same passion."

Timeline: 

1 July-31 December 2014: Italian presidency of the EU

External links: 
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Comments

Gerry's picture

Right from the start of the crisis the approach should have had three different targets. There should have been austerity; to limit and control government spending and waste; there should have been a push to create new employment, to counteract the massive job losses; there should have been policies aimed at achieving economic growth to reduce state debts. To introduce only austerity and to expect that to fix all the problems is a deadly mistake. Someone has to set it right.

Mike Parr's picture

"There should have been austerity; to limit and control government spending and waste"

was government spending out of control? or was it more a case of gov' spending needed to bail out private bank lending - that was out of control? Certainly the case in the Uk wrt the banks, Ireland ditto, Spain ditto, but italy? Greece?)

you appear to make "government spending" "and waste" - synonymous - really? I could make the argument that a significant element of gov spending is a "subsidy" to private employers who fail to provide a living wage - & leave the gov' to top up wages (an approach favoured by several EU governments).

I'd agree with your comments about "new employment" - you fail to mention the "what".

Eurochild's picture

Renzi can't lead because, other than rhetoric, he has nothing to offer. Also, countries become "leaders" in the EU because they have a successful model to emulate - modern Italy only has a model to avoid and Renzi isn't doing anything to improve the situation of his country.

Once Renzi has taken the necessary steps to create a successful Italy, then he can consider that others might look to him for leadership. So far, no one outside of Italy is interested.

A Londoner's picture

What you say make sense but I doubt if Renzi will persuade a sceptical German electorate. He is the PM of a country with a debt of 135% of GDP and with major structural problems; he is requesting the Germans to underwrite debts so that a traditional solution to unemployment (borrowing to fund infrastructure) may be pursued.

I suspect that they will say "if that policy is the key why has Italy not prospered more?"

A Londoner's picture

I suspect there will have to be conditional action with extra spending/investment by the eurozone countries with surpluses -Germany, Netherlands, Finland- conditional on labour market etc reforms in the deficit countries. I have read that Spain is moving in the right direction. However, the key big economies are Italy and France and they seem unchanging.

an european's picture

@ Eurochill
Hi
I don't think but he -> Renzi is one of the most competent Italian Leader which of course and I agree with him in the need of Solidarity against the macroeconimcs imbalances and maybe a punch of good press printing machines too!
why not devaluating the money a little bit instead of austerity or cut social funds !

Eurochild's picture

Dear "an european" (please, if you are going to write so profusely in English, try not to make obvious glaring mistakes; and, who is "Eurochill"?),

How about some real structural reforms, which is exactly what Italy needs to overcome the problems of its sclerotic, dysfunctional and often corrupt public sector and economy?

When a country's public sector debt reaches 135% of GDP it means it has already borrowed and borrowed and borrowed and spent and it still didn't bring this magical growth, because the need for constantly increased borrowing is a result of a dysfunctional and wasteful economy. Sorting that out should be the greatest priority who wants to be deemed credible and to lead.

"Solidarity" in the EU is not about burning money and throwing it away, it's

Suggesting devaluation rather than real reform is only what lazy gits who have no interest in doing real work or in taking responsibility for the real measures that need to be taken do.

How can you say Renzi is one of "the most competent Italian Leader" when is hasn't actaually done anything yet? To lead you actually have to be leading somewhere and doing something. All Renzi has done thusfar is spout juvenile rhetoric. And, generally speaking, to be a national political leader in Europe you have to have been elected to parliament or to the presidency. Renzi has not even been elected to the Italian parliament, so why should we in the rest of Europe be dazzled by his claptrap?

Your daily posts are an embarassment to Europeans.

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