Wednesday

23rd May 2018

Opinion

Can Renzi succeed where others have failed?

  • The Renzi government has a strong sense that the general political tide is turning in its favour. (Photo: Ed Yourdon)

Debt ‘flexibility’ has been flitting in and out of the EU’s lexicon for some time now.

But Italy’s PM Matteo Renzi, a social democrat, whose party in the May European election won the most decisive victory of any Italian party since the 1950s, has put it firmly back on the table.

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 wants the EU’s budgetary rules to be interpreted more loosely– so that money spent for ‘growth-enhancing’ purposes does not count as part of the budget deficit.

At a summit at the end of June, EU leaders agreed both in their conclusions and in the ‘strategic agenda’ for the coming five years that they should make “best use” of the flexibility in the Stability and Growth Pact. Crucially, however, the rules were to remain the same.

Nevertheless Italian officials have been holding this up as a significant blow-to-austerity victory.

The Renzi government has a strong sense that the general political tide is turning in its favour.

In the Italian capital, they like to point out that while the centre-right CSU and CDU (German Chancellor Merkel’s party) combined received 10 million votes in the May EU election, Renzi’s party received one million more votes.

But we have been here before.

French leader Francois Hollande once made great promises on forging a growth pact – to little avail. Spain’s Mariano Rajoy was also bullish about bending the rules when he came to power, only to then fall in line. Mario Monti, Italy’s short-term caretaker leader in 2011/2012, also failed to ease the fiscal rules. They all faced an implacable Berlin.

Meanwhile Renzi’s government has been coy about what exactly it understands by ‘flexibility’.

One Italian source said that Europe needs to learn “how to assess the impact of structural reforms to measure the time needed, the spillover effects and the impact on the budget”.

“If you implement a labour market reform, the benefits will materialise not next year but three years from now,” the contact continued, noting, pointedly that Germany “is profiting from the reform put in place ten years ago”.

However, until now, Renzi, in power since February, is essentially asking for concessions in return for reform promises. Aside from simplification of the tax system, little has been done.

For Merkel, attuned to an electorate that does not want to give anything to southern countries ‘for free’, this is too much talk and too little implementation.

This will also influence the European Commission, which has discretionary powers when it comes to implementing fiscal rules. Its president as well as current economics commissioner have so far given short thrift to the statements coming from Rome.

Renzi gives the impression of one who has enjoyed the quick short fight to the top of Italian politics. Now he has to prove he can deliver on the longterm fight too.

Integration of Syrian refugees in Europe needs scrutiny

Most refugee-related services are outsourced to the private sector and NGOs, which are not adequately monitored and evaluated. When governments and EU institutions provide funding for refugee projects, they should scrutinise the NGOs and private players they work with.

Europe's last wild rivers under threat at Balkans summit

The EU is prioritising motorways and gas pipelines across the potential accession Western Balkan countries, plus hydropower energy projects which threaten one of the world's freshwater biodiversity hotspots.

Erdogan and the Queen

Images of Erdogan being greeted by the Queen will be beamed to Turkish households, a sure boost for Erdogan's bid to make his way back to his own presidential palace in Ankara after next month's elections.

More commitment to renewables from Council, please

More and more consumers are likely to invest in solar panels in the future as it becomes simpler to produce one's own electricity, writes Monique Goyens, director general of BEUC, the European Consumer Organisation.

Stakeholders' Highlights

  1. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  2. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  3. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  4. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  5. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  6. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  7. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  8. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  9. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  10. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  11. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach
  12. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May

Latest News

  1. Feeble EU format deflates Zuckerberg 'hearing'
  2. Are EU data watchdogs staffed for GDPR?
  3. EU pessimistic on permanent US trade exemption
  4. US asks EU to go after Russian and African villains
  5. Facebook threatened with removal from EU-US data pact
  6. Defence firms 'reap benefits' of advice to EU
  7. Athens mayor wants direct access to EU migration fund
  8. Nordics could be first carbon-negative region in world