Monday

18th Dec 2017

Rehn under fire over Berlusconi remarks

  • Silvio Berlusconi - the European Commission was unusually blunt in its assessment of his handling of the Italian economy (Photo: ec.europa.eu)

EU economic affairs commissioner Olli Rehn is at the centre of a political row after blaming Italy's former prime minister, Silvio Berlusconi, for the country's financial crisis.

In an unusually blunt statement in the European Parliament on Tuesday (29 January), Rehn cited Italy's troubles in autumn 2011 as an example of how market pressure built up on heavily indebted eurozone economies.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

He said Berlusconi had made "some promises of fiscal consolidation" as a result of which the European Central Bank entered the bond market "and the situation for a very short while started to improve."

He added that Berlusconi then "decided not to respect the commitments anymore," leading to "a drying out of lending which suffocated economic growth and led to a political dead-end."

Rehn also praised the performance of Berlusconi's successor and rival in upcoming elections, Mario Monti.

"Monti was able to stabilise the situation ... this was clearly an example of the confidence effect," he said.

The commissioner's remarks provoked a furious response from the Italian centre-right.

Renato Brunetta, a member of Berlusconi's government and a former centre-right MEP accused him of "lies" and "defamatory statements." He also called for the European Parliament to carry out an official inquiry into Rehn's behaviour.

Brunetta - who served as Italy's minister of labour between 2008-11 - said that the Berlusconi administration had pushed through budget cuts worth €65 billion as well as plans for a balanced budget by the end of 2013.

Italian industry commissioner, Antonio Tajani, also an ally of Berlusconi, said: "I dissociate myself from what my colleague Olli Rehn said on Italy and I regret it, because it risks making the European Commission appear like it is not [politically] independent."

The commission itself later issued a statement saying Rehn was merely "recounting" events in autumn 2011.

The row comes ahead of parliamentary elections in Italy on February 24/25.

Although EU officials are not allowed to intervene in national politics, Monti, himself a former commissioner, has been widely praised by EU elites for his government's response to the crisis.

Opinion polls indicate the centre-left Democratic party is likely to lead the next government, with Berlusconi's Party of Freedom running between six and nine points behind.

Berlusconi, the three-times Prime Minister was replaced by Monti's technocratic government in November 2011 with the country seemingly on the brink of a massive EU bailout after interest rates on 10 year government bonds reached 6.45 percent.

Bond yields on Italian 10 year papers have since fallen to around 4.2 percent, their lowest level since the start of the financial crisis.

However, Italy remains in recession and anticipates a return to economic growth only in the second half of 2013.

EU leaders back Monti against Berlusconi

Germany's Merkel and other centre-right leaders have indicated they would like to see Mario Monti to keep on running Italy instead of Silvio Berlusconi.

Monti to resign after Berlusconi seeks comeback

Italy's Monti has said he will step down as PM after media magnate and convicted fraudster Berlusconi broke up his parliamentary majority and announced he will stand for re-election.

Italy to run balanced budget, minister says

The Italian economy will run a balanced budget in 2013 before returning to growth the following year, the country's outgoing finance minister has said.

Focus

EU youth unemployment is 'social emergency'

European Commission President Jose Manuel Barroso has put further pressure on governments to create a pan-European youth guarantee scheme to tackle record levels of youth unemployment.

EU set to probe Ikea tax affairs

Swedish founded furniture retailer Ikea has reportedly been targeted by the European Commission, which is set to launch an investigation into how tax schemes in the Netherlands allegedly enabled it to avoid paying into public coffers.

EU ombudsman asks Tusk for more transparency

Emily O'Reilly wants the European Council president to ask the council to join the transparency register, publish information on meetings with lobbyists and publish more notes on the EU leaders' work.

News in Brief

  1. EU-UK Brexit trade deal by January 2021, official says
  2. Bitcoin is 'deadly', Danish central bank warns
  3. EU Commission wants to ban 'legal weed'
  4. France files €10m complaint against Amazon
  5. EU negotiators reach deal on 'circular economy'
  6. Poll: Tight race in Catalonia days before elections
  7. EU: Israel built 8,000 settler homes in six months
  8. China agrees to promote London as centre for yuan

Stakeholders' Highlights

  1. Counter BalanceA New Study Challenges the Infrastructure Mega Corridors Agenda
  2. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  3. Plastics Recyclers Europe65% plastics recycling rate attainable by 2025 new study shows
  4. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  5. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  6. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  7. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  8. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  9. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  10. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  11. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  12. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?