Italy reacted angrily yesterday to demands from Chancellor Angela Merkel that it enact more reforms to bring its 2015 budget in line with EU fiscal rules, saying the German leader’s time would be better spent resolving economic problems at home.
In an interview with German daily Die Welt, Merkel had called on Italy and France to enact additional measures ahead of a March ruling by the European Commission on whether their budgets conform with the bloc’s deficit and debt rules.
Unless further steps are taken by the new deadline, the Commission could fine France for falling short of its deficit-cutting obligations and put Italy under a disciplinary process because of its debt levels.
“The Commission has made clear that what has been put on the table so far is insufficient. I would agree with this,” Merkel said.
However, yesterday a senior Italian official said it was “regrettable” that Merkel viewed the reforms introduced by Italian Prime Minister Matteo Renzi as lacking.
“The Italian government has never permitted itself to hand out marks to a European Union member country and we ask Germany for the same respect,” Sandro Gozi, Italian undersecretary for EU affairs, said in a statement.
“Maybe Chancellor Merkel should focus on Germany’s domestic demand, on its lack of investments, or on its balance-of-payments imbalances. It would be an important contribution that Europe has been waiting on Berlin to make for a long time and which so far has not happened.”
Maybe Chancellor Merkel should focus on Germany’s domestic demand and on its lack of investments
There was no immediate reaction from France.
Last year, the Commission won new powers to assess draft national budgets to ensure they are in line with EU agreements.
But insisting that countries rework their budget plans remains politically sensitive.
French Finance Minister Michel Sapin said last week during a visit to Berlin that France would do what was necessary to meet its EU obligations but that boosting growth had to be the top priority.
A day later, he announced that France was aiming to cut its deficit to 4.1 per cent of gross domestic product (GDP) in 2015, compared to a previous goal of 4.3 per cent, thanks to extra savings.
France initially pledged to bring its deficit down to the EU limit of three per cent by 2013 but has now acknowledged that it won’t reach that threshold until 2017.
Meanwhile in another interview yesterday Merkel also accused Russia of interfering in the domestic affairs of numerous countries that are seeking closer ties to the European Union.
“Moldova, Georgia and Ukraine are three countries in our eastern neighbourhood that have taken sovereign decisions to sign an association agreement with the EU,” Merkel told German daily Die Welt in an interview.
“Russia is creating problems for all three of these countries,” she said, pointing to “frozen conflicts” in breakaway regions like Transdniestria, Abkhazia and South Ossetia, as well as Russian interference in eastern Ukraine.