Austerity Only Benefits Germany and Destroys Europe, Renzi Says

  • Italian Prime Minister blasted EU budget rules from New York
  • Renzi’s tough language comes as Italian economy, banks falter

Italian Prime Minister Matteo Renzi had some fighting words for German leader Angela Merkel: Your obsession with austerity is strangling Europe and your country is the only one profiting.

That view, held by others in the European Union, rarely gets aired publicly quite so forcefully. Especially by Renzi, who until recently had deployed priceless ancient Roman art and Ferraris in some of Merkel’s recent visits to Italy. But Brexit, which exposed cracks in the European project, has made the EU more vulnerable to jabs.

In New York for the United Nations General Assembly, while Merkel hung back at home to face an angry electorate, Renzi lashed out.

"Stressing austerity means destroying Europe,” Renzi told an audience of policy experts at the Council on Foreign Relations. ”Which is the only country which receives an advantage from this strategy? The one which exports the most: Germany.”

Political future

The 41-year-old premier has staked his political future on a referendum on constitutional reform that polls show he could narrowly lose. Confronted with an economy in trouble, he’s stepped up criticism of the EU’s rigid budget deficit limits and of the nations seen as wielding the most power in the 28-nation bloc: Germany and France.

His appeal for more flexibility has grown more strident as pressure mounts for him to pick a date for when Italians will vote on cutting back the Senate with the aim of making governments more stable and simplifying the passage of legislation. The referendum is expected to take place by the end of the year, and Renzi has said he would quit if he loses.

In the meantime, relations with Merkel and Francois Hollande of France have soured. Renzi refused to join their news conference after last week’s EU summit in Bratislava, Slovakia because he couldn’t share their economic policy or stance on migration. The summit statement, he said, was "technocratic, lacking vision.”

In August, he had hosted a dinner for both on a warship along the coast off Naples. At the UN, where Renzi will address fellow leaders, he did not plan to cross paths with Hollande.

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