Monday

29th Aug 2016

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

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.

Italy earthquake is test for Renzi

Italian prime minister is expected to present a quick reconstruction plan and request more budget flexibility from the EU after this week's tragic earthquake.

News in Brief

  1. Hungary plans to reinforce border fence against migrants
  2. France's highest court suspends burkini ban
  3. Greeks paid €1bn more in taxes in June
  4. Greek minister denounces EU letter on former statistics chief
  5. Turks seeking asylum in Greece may cause diplomatic row
  6. Merkel becomes digital resident of Estonia
  7. Report: VW will compensate US dealers with €1bln
  8. EU mulls making Google pay news media for content

Stakeholders' Highlights

  1. GoogleBrussels - home of beer, fries, chocolate and Google’s Public Policy Team - follow @GoogleBrussels
  2. HuaweiSeeds for the Future Programme to Bring Students from 50 countries to China for Much-Needed ICT Training
  3. EFASpain is not a democratic state. EFA expresses its solidarity to Arnaldo Otegi and EH Bildu
  4. UNICEFBoko Haram Violence in Lake Chad Region Leaves Children Displaced and Trapped
  5. HuaweiMaking Cities Smarter and Safer
  6. GoogleHow Google Makes Connections More Secure For Users
  7. EGBAThe EU Court of Justice Confirms the Application of Proportionality in Assessing Gambling Laws
  8. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests
  9. Dialogue PlatformInterview: "There is a witch hunt against the Gulen Movement in Turkey"
  10. ACCAACCA Calls for ‘Future Looking’ Integrated Reporting Culture With IIRC and IAAER
  11. EURidNominate Your Favourite .eu or .ею Website for the .EU Web Awards 2016 Today!
  12. Dialogue PlatformAn Interview on Gulen Movement & Recent Coup Attempt in Turkey