EU Liberals Reject Tie-Up With Italy’s Five Star on Euro Split

  • Group led by Guy Verhofstadt ends flirtation with Beppe Grillo
  • Request by Grillo seen as effort for domestic political boost

The pro-business Liberals in the European Parliament have rejected a membership request by Italy’s anti-establishment Five Star Movement because of differences over the euro.

Leadership of the Liberals in the European Union assembly opposed the tie-up at a meeting on Monday in Brussels, according to a spokesman, who said a prime obstacle was Five Star’s continued call for an Italian referendum on Europe’s single currency. Almost four-fifths of Five Star voters in an online poll called by Beppe Grillo, the party’s founder and comic-turned-politician, supported joining the Liberals, who are staunch supporters of the EU and the euro.

An aide to Grillo phoned Liberals’ leader Guy Verhofstadt at the last moment to demand a change to pro-euro wording in a draft manifesto aimed at uniting both groups in the EU Parliament, according to the spokesman. The draft praises the 19-nation euro while saying governance of the monetary union needs to be improved.

“Our single currency has proven to be stable and resilient against external shocks, but it has fallen short in strengthening our economy and achieving convergence between the national economies,” according to the draft text that sparked objections from Five Star. “It is high time to fix some of the underlying flaws.”

The failed tie-up highlights the limits to political cooperation in an EU Parliament that has become more fragmented in recent years. Mainstream political forces in Europe have been on the back foot since 2014 European legislative elections that saw a surge in populist members and last year’s U.K. vote to leave the 28-nation EU.

Growing success at the ballot box for anti-establishment parties also has highlighted differences within and among them and raised questions about their ability to govern. Five Star’s bid to join the Liberals, also known as ALDE, could have signaled a readiness by Grillo to distance himself from elements of his party’s populist platform.

‘Anti-Euro Lunatics’

“Whether or not ALDE accepts an eventual membership application, the Five Star Movement is showing goodwill and at the least making it harder to be dismissed as anti-euro lunatics,” Rome-based political consultancy Policy Sonar said in a note earlier on Monday. “The main risk in the gambit is a backlash from party militants.”

The ranks of the Liberals in the EU Parliament would have swollen to 85 with the entry of the 17-strong delegation from Five Star. The Liberals would have become the No. 3 group by leapfrogging the European Conservatives and Reformists, whose members include U.K. allies of British Prime Minister Theresa May. The Christian Democrats and Socialists are the top two factions in the 751-seat assembly.

“There is insufficient common ground to proceed with the request of the Five Star Movement to join the ALDE group,” Verhofstadt, who is also the EU Parliament’s point person for the upcoming Brexit negotiations, said in a statement on Monday evening. “There remain fundamental differences on key European issues, like, for example, the common currency.”

— With assistance by John Follain

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