Italy minister: German austerity has ‘weakened’ Europe

Graziano Delrio [Camera dei deputati/ Flickr]

Italian transport minister Graziano Delrio claims that austerity policies imposed by Germany have weakened the European project and that the FIAT emissions scandal needs clarification from Berlin. EURACTIV’s partner Milano Finanza reports.

Graziano Delrio has been Minister of Infrastructure and Transport since April 2015.

He spoke with Milano Finanza’s Andrea Cabrini.

How does Italy’s economy look ahead of the G7 summit in Taormina this weekend?

Not as bad as you might think but still serious. There is still an open question about getting women and children into work. That’s in addition to other problems like organised crime and the North/South divide. I remember that from the 1990s up until now, Germany invested €1.6 trillion, the same as Italy’s entire GDP, in integrating East Germany. We need planning and investment too. We want the trains to run faster. They actually run slower in Germany but they are more frequent. We’re obsessed with going faster and they focus on robustness. That, as well as discipline, is what we lack.

Italy’s lacking economic growth too. There is some but it remains the lowest in Europe.

Our main solution is to allow those that create wealth and jobs to do so more quickly and more efficiently. That’s why we’re reducing the tax burden on companies. There’s also the matter of investment.

Are you going to raise the issue of resources with the G7?

We’re hosting the Transport G7 in Cagliari but we’ll also talk about it in Taormina. The real choice now is to accept that we need an investment plan that goes beyond the limitations of Europe and focuses on big infrastructure and airport hubs. I would be more than happy to get out of the slump we are in but we have to believe in Europe.

Do you still believe in it?

We’ve fought for it because we believe in it and believe in strengthening, not weakening, Europe. German austerity has weakened the European project. But what we might call a certain Italian joy has also done that. We need a political vision now.

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Namely?

For example, the output gap (the amount by which actual economic output falls short of its potential) is not religious dogma. It’s a calculation made by an official in an office, who sets certain parameters. There are more intelligent ways of calculating it.

Do you think Europe will be more intelligent now we have had the French elections?

The real question is: does Europe want to become a political entity? Or does Macron want more space dedicated to the fantastic France-Germany axis, which has worked so well?

What are you referring to?

I’m referring to when we have brokered big deals with the French and then at the last minute they break down and they agree something with the Germans instead.

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So the sound of the Ode to Joy playing when Macron made his first appearance after his victory wasn’t enough?

In order to become a political entity, we have to decide whether we want a common defence, a single finance ministry and to make joint policies on issues like youth employment. If that’s the choice, then it’s clear that having pro-European leaders opens the door to more opportunities to build this common framework.

FIAT-Chrysler (FCA) suffered on the markets last week after the EU announced an infringement procedure and there were rumours of an investigation in the United States.

What has happened is wrong and could have been avoided. In March, we held a mediation session with Germany that everyone was satisfied with. So this news has come unexpectedly and now we need clarification on the matter. Also, if I trust Germany’s certification, they have to do the same with ours.

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What is the Italian government’s next move?

I immediately contacted the European Commission in order to offer my own clarification and we are following the matter closely. Here we are talking about a legal device that could have functioned better, not an illegal one that should not be installed in cars, like with the Volkswagen case. We’re talking about apples not pears here. I’ve noticed that other EU members are willing to defend their own national interests, so Italy has to be prepared to do the same.

Will Alitalia’s aircraft continue to fly?

Alitalia needs private investment. If there is to be a tomorrow, it needs it today. The market is there. We recently celebrated upping investment in airport infrastructure from €1.8 to €3 billion. There is a great demand for mobility and I believe that there are people interested in filling that role. Someone will step in, whatever the airline’s destiny turns out to be.

Is it true that the Chinese investors you just met with are the most interested?

Yes. I just came back from China and I can confirm that there is strong interest in Alitalia there, as well as in Italy in general. Remember we are also talking about millions of people escaping poverty and joining the middle class. Travelling to Italy has become one of the most popular aspirations.

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The government is going to have to put forward new financial measures after the summer. How difficult is that going to be?

It’s going to be a difficult discussion, I don’t deny it. Exactly because we have to reconcile the need for financial rigour and stimulus in order to create growth, which we sorely need. It’s clear that we don’t have a lot of room for manoeuvre but Italy does not have a sick economy. We do have a lot of public debt but we have a strong primary surplus and low private debt compared to other countries. That’s why these upcoming measures cannot afford to suppress consumption, for example by increasing VAT. The goal is to continue stimulating private and public investment, by creating a climate of trust.

Is it certain you will put forward these measures though?

That’s for parliament to decide. As far as we are concerned, we are intent on making it to the end of the legislature. There is continuity between the previous executive and the Gentiloni government too.

Matteo Renzi is back at the head of the Democratic Party. What lessons have been learned?

In terms of December’s constitutional referendum, the real mistake was believing it to be the medicine that would cure all of the country’s ailments. It wasn’t the case, even if I do remain convinced it would have made things simpler and more efficient. Our intentions were good but maybe we puffed our chests out too far and thought that would be enough to get the win. We need wisdom and courage in these matters and maybe we’ll use them more the next time. As Confucius said though, you gain wisdom through thinking and experience. It’s a painful process.