Saturday

1st Oct 2016

Combative Renzi hits out at German central banker

  • Barroso and Renzi (r) - 'Our problem is not Germany' (Photo: ec.europa.eu)

A combative Matteo Renzi on Friday (4 July) slapped down comments directed at Italy by German central banker Jens Weidmann, saying banks have no business getting involved in Italian politics.

Speaking to press in Rome to mark the launch of country's EU presidency, the Italian PM referred to “polemical arguments by some German bankers,” and said "I believe the Bundesbank has a task and that is the pursuing of its statutory goals. The Bundesbank does not have among its tasks to take part in the Italian debate.”

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"Just as I don’t talk about the sparkassen or the regional banks, then I don’t expect the Bundesbank to talk about Italian politics”.

He was resonding to statements made by Weidmann on Thursday.

The German noted Renzi had called the EU a “boring old aunt” which tells Rome what to do, saying such comments indicate Italy is not seriously committed to giving up fiscal sovereignty.

The Italian media took it up as front page news, saying Weidmann was chastising Italy for not reforming quickly enough.

It is the second time in as many days Rome has felt itself under attack by a German politician.

Media also gave front page treatment to the head of the centre-right faction in the EP, Manfred Weber, who in Strasbourg this week strongly challenged Renzi’s call for flexibility on applying the rules underpinning the euro.

Weber said it would not be fair to other countries, such as Ireland and Portugal, which had passed painful reforms while trying to bring their budget deficits to below the three-percent-of-GDP required by EU rules.

Italians were clearly irritated by Weber’s words, with one contact remarking that the German deputy had been “very unhelpful” and was “not speaking on behalf of the EPP”.

But Renzi was also careful not to make Italy out as a victim or to drag in German Chancellor Angela Merkel.

“Our problem is not Germany. Our problem is Italy. We need to reform Italy and we are aware of that”, he said on Friday.

"I have not seen any marked disagreements with German politicians. There is no contrast with the German government in respect of either stability or flexibility."

War of words

The war of words represents a new fault line in European politics, with Renzi, a young and ambitious Social Democrat riding the back of a strong victory in the EU elections, setting out to challenge the northern Europe-dominated narrative of fiscal rectitude and austerity.

He has positioned himself as the champion of a "flexible" interpretation of the euro rules. However, the interpretation of the word is in itself flexible.

Rome has been saying it has won concessions on the incoming commission's strategic agenda and on how euro rules are applied. But diplomats from some other member states argue it has won little.

The European Commission, for its part, notes that it is already being flexible, having given extra deficit-reduction time to France, Spain, Italy, Portugal and Greece.

Commission president Jose Manuel Barroso, also in Rome on Friday, said “I believe this debate is a little overblown" and indicated that Rome needs to undertake "structural reforms" to get into Brussels' good books.

While Renzi has been busy shaking up the European political scene, his power is seen as dependent on his ability to carry out changes.

The Italian leader has said he intends to reform the tax, judicial, public administration and electoral systems.

He has given himself 1,000 days to do it, beginning 1 September and ending 28 May 2017. He says his Italian goals are part of a wider effort of "injecting hope and enthusiasm into Europe".

New EU rules on financial products in limbo

A feud between MEPs and the EU commission is threatening to derail financial services regulation that would protect consumers from misleading investment products.

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