Merkel Thwarted by Renzi on Quick Funding to Curb Refugee Flow

  • German chancellor says $3.3 billion for Turkey is `urgent'
  • Italian premier holds out, says questions unanswered

Italian Prime Minister Matteo Renzi resisted pressure by Angela Merkel to free up a 3 billion-euro ($3.3 billion) aid package for Turkey to help reduce the flow of refugees to Europe that’s undermining the German chancellor’s domestic support.

QuickTake Europe's Refugee Crisis

Fresh from defusing a spat over refugee policy in her coalition that threatened her chancellorship, Merkel ran up against Italian resistance to a key element of her plan to stem a record influx of asylum seekers and avoid border closures inside the EU that she says would threaten the European Union’s single market.

“We discussed the EU-Turkey agenda, whose implementation is now urgent, because we need to move forward,” Merkel said at a joint news conference with Renzi after talks at the chancellery in Berlin.

Renzi countered that while he has “no problem with Turkey or Germany” on the funding, Italy is waiting for European Union officials “to give us some answers on queries we have expressed on the way this contribution, and other contributions necessary for immigration, are conceived.” Italian officials say funding shouldn’t come out of the country’s budget because it’s already paying for aid to refugees arriving in Italy.

While accepting praise from Merkel for his domestic policy agenda, Renzi renewed his attacks on fiscal austerity that Germany has championed in response to the euro area’s debt crisis.

Merkel struck an encouraging note, wishing Renzi success with his reforms -- including of the labor market and of parliament -- “because this will be an important contribution to the future of Europe, and to the future of Italy first of all.”

She didn’t respond to the denunciation of austerity by Renzi, who said Europe needs “a course completely different from the one we have seen in the last years” and that austerity policies “on their own don’t help Europe grow again.”

Renzi also renewed his attacks on European Commission President Jean-Claude Juncker, saying that budget flexibility, which Italy is seeking to obtain to help it boost a weak recovery at home, was a “condition” for Juncker’s election to the post.