ROME (Reuters) - Italian Prime Minister Matteo Renzi called on Tuesday for a change of course in Europe, saying that austerity policies on their own could not guarantee fiscal stability in the face of rising unemployment and economic stagnation.
Speaking in parliament ahead of this week’s European Union summit, Renzi said Italy was not asking for a relaxation of EU budget rules but for existing rules to be flexibly applied in exchange for commitment to a package of domestic structural reforms that Italy would achieve by 2017.
“It is obvious that the trade-off between the reform process and the use of the margins for flexibility which already exist and which are available to member states is what has always happened,” he said.
Renzi said that when Italy takes over the rotating EU presidency next month, he would outline a “1,000 day” program for which he would seek parliamentary approval and that would be achieved by May 2017.
Speaking as leader of a country that has seen no economic growth for more than a decade and that has a youth unemployment rate of more than 40 percent, Renzi said the “high priests” of austerity risked condemning Europe to stagnation.“ The treaty obliges us to look at growth and stability as elements which go together. There can be no stability possible if there is no growth in Europe and economic policies of recent years have failed because of this,” he said.
Renzi said the discussion on the next president of the European Commission, one of the main sticking points before the June 26/27 summit, had to take account of the result of last month’s European parliamentary elections in which the center-right took the most seats.
But it could not be a simple matter of following the election result, he said.
The process of appointing the next Commission president, one of the most powerful positions in the 28-member bloc, has been overshadowed by Britain’s fierce opposition to former Luxembourg Prime Minister Jean-Claude Juncker, the Brussels insider backed by most other member states.
Renzi, who attended a meeting of center-left leaders in Paris on Saturday which agreed to back Juncker, said the decision on the presidency had to be part of a broad discussion on policy and on who should fill other top bloc posts, including head of the European Council or the foreign affairs chief.
“It’s impossible to imagine a process that stops Europe having a broad overall view,” he said.
Editing by Alessandra Galloni and Louise Ireland