MEP Rodrigues: Imposing eurozone ‘as it is’ on Italy is not the answer

MEP Maria Joao Rodrigues said that Italians faced an "impossible dilemma" between remaining in a flawed eurozone or exiting it. [European Parliament]

Populist forces in Italy are “playing with fire” and exposing the country to market pressure, vice-president of the Socialist Group in the European Parliament Maria João Rodrigues warned in an interview.

She told EURACTIV that the solution is not to offer the Italians the choice of remaining in the eurozone with an “austeritarian approach” but to create the conditions to overcome the situation of “asphyxia”.

Maria João Rodrigues is a Portuguese MEP and member of Partido Socialista. She is also the chair of the Socialist and Socialdemocrats network to reform the eurozone.

Maria João Rodrigues spoke with EURACTIV’s Jorge Valero

The Italian crisis is one of the most challenging situations the eurozone has faced in recent times…

It is a very worrying situation. We need to understand why it is happening in Italy. This is a particular combination of different overlapping crises. Firstly, the financial and eurozone crisis. We cannot say at all that the crisis is over. Secondly, the migration crisis, with a lack of European solidarity. This mix created an explosive situation, and had driven a big part of Italian population, who were pro-European in the past, to start becoming Eurosceptic or even anti-European.   

Brussels lies low as Italy crisis continues

The European Union is treading cautiously as the political crisis in Italy fuels fear of a renewed threat to the long-term credibility of the eurozone.

So what now?

The Italian population is confronted with an impossible dilemma: either to remain in the eurozone, accepting it as it is, driven by the austeritarian approach that is still the case; or to consider leaving the eurozone. Neither are good choices. There is a third alternative: changing the way the eurozone operates. It is about creating real conditions for recovery, for investing in the future, for creating more and better jobs and increasing internal demand in Italy. And for creating conditions in Italy to overcome the situation of a sort of asphyxia.

We have seen over the past year how Europe has been incapable of reforming itself in good times. This impossible dilemma could end up as a choice not only for Italians. Are we Europeans all trapped in an impossible dilemma?

The Italian situation is the extreme case of a European crisis. The eurozone architecture is deeply flawed, completely different from other monetary areas in the world. Our monetary zone  doesn’t count on strong financial, budgetary and political pillars. We have been warning about this since the beginning, since the adoption of the euro. The financial crisis showed these major flaws. Now we are in a more positive trend, in a recovery period. But I never had illusions. It is an extremely fragile recovery, because it is based on a eurozone that is deeply flawed.

What do you think is going to happen in Italy? Will there be a vote on its eurozone membership?

It is a very volatile situation. Something clear to me is that the anti-European forces are playing with fire suggesting that the country could leave the eurozone, or manipulating the sequence of political events in order to force an election to try to gain a new electoral advantage.

This is irresponsible because it is exposing Italy to the pressure of the markets. And it is undermining what should be the real solution, which is to have a pro-European government able to pursue the necessary reforms and investment in Italy. But also able to play a constructive and demanding role at European level in this crucial and historic moments where we do need to reform the eurozone.

Oettinger: Markets will show the way to shun populists in Italy

Markets will persuade Italians not to vote for the two populist parties that have tried and failed to form a government this month, the anti-establishment 5-Star Movement (M5S) and the anti-migrant Eurosceptic League, the EU’s budget Commissioner said in an interview with Deutsche Welle.

Was Commissioner Günter Oettinger wrong when he made those comments about Italy and the markets?

For sure. As we know from the Greek crisis, this is an irresponsible self-fulfilling prophecy. This is something that we should never refer to.

On the contrary, we need to emphasise the role of political actors in Italy, starting with the president of the Republic, which are acting with responsibility and a pro-European stance, but at the same time, are open to reform.

The solution is not to impose on the Italian population the eurozone as it is, but to propose remaining in the euro while requiring eurozone reform takes place at the same time. 

Europe’s reform push faces reality check

The impulse to bolster the eurozone, sparked by Emmanuel Macron’s victory in France almost one year ago, is losing its vigour as political instability persists and a group of countries have solidified their opposition to bold changes.

The eurozone flaws are well known, and we also know that Germany has always been the obstacle to progress. Now it is a social democrat minister who is blocking the agenda in Berlin. How big is your influence to lift Germany’s blockade?

These proposals were blocked first of all by the conservative family in Europe, which is still dominant. In the Socialist family, there are also differences, in particular within the German social democrats. Some of them are hesitating to support these reforms. 

What is going to happen in the run-up to the crucial EU summit in late June?

In the Council of ministers, we have a new situation because the Eurogroup president (Portuguese Mario Centeno) is clearly in favour of reforms, supported by other ministers.

But some ministers, in particular from the Netherlands and Austria, are resisting these reforms. The balance of power will be decided by the German minister, Olaf Scholz. He just took up the post and he needs to understand the situation. He took some positive steps in the last Ecofin Council in order to complete the banking union. But of course we want more from this minister.

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Member states have reached an agreement on a package of measures aimed at reducing risk in the banking industry. The political consensus built upon a joint proposal by the French and German Finance ministers paves the way for a deepened reform of the Economic and Monetary Union.

Are you going to visit him? What is your leverage with him? 

Yes, I will meet with him in Berlin. My leverage is that I am the chair of the network of the Socialist and the Social democrat family across Europe and recently we concluded the report to reform the economic and monetary union. I intend to discuss this report with him.

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