Tuesday

31st May 2016

Berlusconi: Other EU states in no position to 'give lessons'

  • Italy is under mounting pressure from the rest of Europe to push through austerity and structural adjustment despite fierce domestic opposition (Photo: Alessandro Marotta)

Other European states are in no position to "give lessons" to Italy, the country’s prime minister, Silvio Berlusconi, has said, lashing out at mounting pressure on Rome to bring an end to internal political divisions and push through radical adjustment measures.

"Nobody in the union can appoint themselves administrators and speak in the name of elected governments and the peoples of Europe," the Italian leader said in his communique on Monday (24 October).

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"No one is in a position to be giving lessons to their partners."

The missive followed a humiliating EU summit in Brussels on Sunday for Berlusconi where the Italian leader was browbeaten behind closed doors for his government’s inability to make good on promises of austerity and an overhaul of the country’s economy.

Later, EU presidents, Jose Manuel Barroso of the commission and Herman van Rompuy, of the EU Council, publicly demanded that member states return to Brussels by Wednesday with clear commitments on how they will put their fiscal house in order. While Italy was not mentioned by name, Rome was the intended target of the pointed remarks.

A knowing glance and smirk between French President Nicolas Sarkozy and German Chancellor Angela Merkel at a joint press conference on Sunday evening when asked by a reporter if they had faith that Italy would deliver was perhaps the most humbling for Berlusconi.

Newspapers across the country were quick to highlight the shame heaped on Italy by the belittling body language, which told the world much more than any public statement what the EU’s two major powers really think of the state of the country’s governance.

The angry letter from Berlusconi’s office went on to say how Italy had "already done and is trying to complete what is in both the national and European interest as well as in line with its sense of justice and social fairness."

The missive pointed out that the need for a second round of bank bail-outs is "particularly" a concern for France and Germany. Italian banks for their part are in a safer position than Paris-based financial institutions, which are heavily exposed to Greek debt.

The statement was released ahead of an emergency cabinet meeting that despite two hours of discussions ultimately produced little that could assuage Franco-German worries despite Italy's big promises on reform.

Cabinet disagreements notably over changes to retirement age remained unresolved, according to domestic sources.

The governing party’s key coalition partner, the Northern League, has repeatedly said it will not support a hike in the retirement age from 65 to 67, a warned re-issued on Monday by the party’s parliamentary leader.

Following the inconclusive cabinet meeting, Berlusconi continued talks with Northern League ministers and finance minister Giulio Tremonti.

In August, the European Central Bank stepped in with massive purchases of Italian and Spanish government bonds in an effort to bring down the cost of borrowing for the two countries.

While the programme was initially successful, Italian 10-year bond yield are now close to six percent - within spitting distance of the levels hit in the summer.

Finance ministers baulk at tax-avoidance rules

Member states will discuss again in June a proposed directive to outlaw practices used by large companies to avoid paying taxes. Meanwhile, the European Parliament makes progress on its probe of Panama Papers.

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