London: Matteo Renzi, the Italian prime minister, launched a scathing attack on Germany’s powerful central bank yesterday, telling it to stop meddling in Italy’s affairs after the head of the Bundesbank, Jens Weidmann, criticised Rome for allegedly imperilling recovery from the eurozone crisis.
Launching Italy’s six-month rotating presidency of the EU, while also pledging 1,000 days of radical reform in Italy after the summer break, Renzi stepped up what appears will be the signature campaign of his tenure at the top of the EU — the attempt to get Berlin to relax austerity and give him scope to try to kickstart the Italian economy.
Berlin and Rome are locked in a worsening war of words over how to interpret “flexibility” as applied to the stability and growth pact, with the Germans insisting that budget deficit and government debt ceilings cannot be diluted and also maintaining that Renzi must deliver on his promises of structural reforms of the ossified Italian economy before he can be offered any sweeteners.
Amid a resurgence of tension between the north and the south of the eurozone, Jens Weidmann, the head of Germany’s Bundesbank and Angela Merkel’s former economics adviser, accused Renzi of talking about long overdue economic reforms in Italy but failing to deliver them. He claimed that Italy was attempting to interpret the rules “too generously”.
Renzi emphasised that there was no dispute with Merkel or the German government, but he criticised Weidmann, accusing him of political interference.
“The Bundesbank does not have to take part in Italian political debates,” said Renzi. “I don’t expect the Bundesbank to talk about Italian politics. Europe belongs to its citizens, not to its bankers, and not to Italian or German bankers.”
Italy has one of the highest national debt levels in the EU, at 130 percent of gross domestic product, more than double the 60 percent ceiling stipulated by the eurozone regime. Attempts to reduce it have confounded successive governments.
Renzi is riding a wave of popularity at home, despite his declared mission of radical economic reform. The Guardian
