Italy seeks new leadership role in Europe

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”.