BRUSSELS: Britain’s slender hopes of securing Italy’s support in its bid to stop Jean-Claude Juncker becoming European Commission president crumbled yesterday when Germany offered Rome a gentler interpretation of EU budget rules.
Chancellor Angela Merkel’s acknowledgement that European Union deficit curbs should be applied flexibly to promote growth was a gesture to Italian Prime Minister Matteo Renzi, all but ensuring he backs Juncker’s nomination at a summit tomorrow.
“The German government agrees that the Stability and Growth Pact offers excellent conditions for (promoting growth and competitiveness), with clear guard rails and limits on the one hand and a lot of instruments allowing flexibility on the other,” Merkel told Germany’s lower house of parliament. “We must use both just as they have been used in the past.”
The EU summit starts today. The tilt in economic policy and the likely appointment of Juncker highlight a new political balance in Europe that is set to shape the EU’s institutions for the next five years, with the risk of Britain drifting away.
British Prime Minister David Cameron renewed his promise in parliament to fight to the end against Juncker’s nomination but seems set to be overwhelmingly defeated in an unprecedented summit vote he has demanded.
The leaders of Sweden and the Netherlands, who initially shared Cameron’s reservations, both announced they would not block Juncker and a senior German official forecast “a very large, dominant majority” in favour of the appointment. The tentative convergence between Italy and Germany points the way towards a German-style “grand coalition” of the centre-left and centre-right at European level, with Renzi, the young reformer, in the frontline with Merkel.
Renzi, whose centre-left party won a resounding victory in European elections last month, boosting his profile on the EU stage, has made budget flexibility a central issue as he searches for ways to kickstart his flaccid economy.
Sandro Gozi, Italy’s undersecretary for EU affairs, accepted there was no question of altering the 2005 stability pact, just a need to apply it more flexibly to favour investment spending and allow countries implementing growth-enhancing reforms extra time to meet deficit and debt targets.
In a warning shot to placate German fiscal hawks, Merkel’s conservative parliamentary group said Renzi wanted to deviate from the path of stability but Berlin would not allow any “dirty tricks” that put Europe on a “comfortable but fatal debt track”. Italy takes over the EU’s rotating presidency six months in July, determined to re-energise the union and change the way it works.
Going against the European grain, Cameron has waged a vocal campaign against Juncker, 59, casting him as an old-school federalist who does not have the skill or energy to breathe new life into the EU. He has also objected to the principle of EU leaders’ letting the European Parliament effectively determine the choice, since Juncker was the leading candidate of the centre-right group that topped the poll in the European elections. Reuters
