Renzi plots EU collision course

Known as “demolition man”, Italian prime minister Matteo Renzi never shies away from a fight. He got his job two years ago after steamrollering the old guard of his Democratic Party (PD), which had tried in vain to block his ascendancy. Once in power, he locked horns with trade unions, intellectuals and anyone who dared criticise his labour and constitutional reforms.

In recent months, facing a banking crisis and doubts over his reformist credentials, the youngest leader Italy has had since Fascist dictator Benito Mussolini has chosen a new villain: the European Union, accused of being an obtuse bureaucratic Leviathan fuelling political and economic doom, with the help of Berlin.

On Sunday, as the 41-year old told PD cadres that a US-style primary was needed to pick Jean-Claude Juncker i’s successor to the presidency of the European Commission, Renzi said “the EU does not work, being reduced to an ensemble of numbers and regulations”.

He complained that “we can’t continue with a technocracy of people who no longer know how to relate to people”.

'Genuine, committed European'

The rhetoric masks very practical domestic concerns: the need to get around EU rules that limit deficit spending and aid to the financial sector, just as Renzi’s government is trying to pump up a fledgling economic recovery through tax give-aways and helping banks get rid of bad loans, a major impediment to growth.

But it also taps into a belief that Brussels is nit-picking while missing out on the big picture: that record migration inflows, Britain’s isolationist demands and the rise of nationalists like Marine Le Pen i are endangering the entire EU edifice, which needs bolstering from decisive action, including a reversal of Berlin-sponsored austerity policies.

“Nobody can convince me that Renzi is not a genuine and committed European,” Gianni Pittella i, a Renzi ally who leads the Socialist group in the European Parliament, told Euobserver.

“He is a sincere EU crusader because he has realised, just as I have even if I am a little older than him, that some things are not working and if we do not change course, Europe will collapse.”

While relatively inexperienced and clearly impatient with EU etiquette, Renzi has already proved able to squeeze results out of the Brussels machine, for example when he dug in his heels in 2014 over the appointment of Federica Mogherini as EU foreign policy chief.

Juncker's ire

Never short of self-esteem, the Italian leader says he can afford to drop reverential tones towards the EU - traditionally regarded by Rome elites as a nanny who could help them discipline an unruly nation - because, thanks to him, the country is no longer a problem child and can now challenge Germany to the role of star pupil.

He is also emboldened by the belief that it is in the EU’s best interests to help him stay in power because “any government alternative in Italy would be worse”, Riccardo Perissich, a former director general at the EU Commission, wrote last week for the Istituto Affari Internazionali think tank.

“For years, Italy was morally indebted to European institutions,” Renzi wrote in a 1 February newsletter. “Now things have changed. Reforms have become laws and after three years of recession economic fundamentals are positive again. We can therefore go back to our job. And our job is to lead Europe, not go to some Brussels building to take orders.”

Such remarks have set him on a collision course with Juncker, who is due to visit Rome in late February to clear the air.

Last month, the former Luxembourg prime minister lashed out at Renzi for "vilifying and criticising the commission on every street corner”, after Italy held up a €3 billion deal on refugee aid for Turkey.

Renzi responded within a fortnight by suggesting - at a press conference with Angela Merkel i in Berlin - that the EU chief’s job was on the line if he failed to grant fiscal leeway to Italy and others.

“For us, flexibility [on deficit rules] was a prerequisite to the deal that led to the election of Jean-Claude Juncker. I have not changed my mind on flexibility; I hope it is the same for Jean-Claude Juncker,” he said.

One out of four

While high-brow commentators have criticised Renzi’s attitude, pollsters say Italy’s increasingly eurosceptic electorate appreciates his belligerence, which may help the premier sap votes from the anti-establishment Five Star Movement (M5S) and the far-right Northern League in local elections due in May or June.

Trust in the government and the prime minister has rebounded, reversing a two-week decline, the IXE research institute reported Friday (5 February). Three days later, it estimated support for the PD at 34.1 percent against 24.7 percent for the M5S, 14.2 percent for the League and 11.2 percent for the conservative Forza Italia of former prime minister Silvio Berlusconi.

“I can imagine that a lot of people who don’t read the editorials in the broadsheets are happy to see on TV that their prime minister is banging his fist on the table,” David Allegranti, a journalist who has tracked Renzi’s meteoric rise from mayor of Florence to leader of a G7 nation in less than five years, told Euobserver.

But several analysts question the grandstanding, pointing out that it may rest on fragile foundations, since Italy's economy is limping below the eurozone average, while markets are fretting about the solidity its banks, as shown by Monday (8 February) sell-offs on the Milan bourse that triggered a minor panic.

“It is legitimate to ask whether it would be better to lower the tone in public and restrict the table banging to private negotiations,” said Perissich.

Political commentator Enrico Cisnetto, for his part, has warned on his Terza Repubblica blog that excessive EU bashing from Rome may provoke moves to create a two-speed Europe with Germany at its core and Italy at its fringes.

Daniel Gros, director of the Centre for European Policy Studies, a Brussels think tank, challenges the assumption that Renzi can raise his voice as payback for his reforming record.

Speaking to EUobserver, the German-born academic recalled that there were four chief EU recommendations for Italy: liberalising its labour market, fixing its bureaucracy, trimming public spending and shifting taxes from labour to assets.

“Renzi’s score is one out of four,” Gros said.

“He has delivered the labour reforms, passed a mock reform of the public administration and done the opposite of what he had promised and on the other two fronts,” he said, dismissing Renzi as “far less credible” than his predecessors, the scandal-tainted Berlusconi excepted.