Merkel
and Renzi bury the hatchet
Berlin
signals flexibility on finances, Rome unblocks EU aid for Turkey.
By MATTHEW
KARNITSCHNIG 1/29/16, 4:08 PM CET Updated 1/29/16, 5:59 PM CET
BERLIN — Angela
Merkel and Matteo Renzi offered a picture of unity as they emerged
from an extended lunchtime summit in Berlin, signaling that they had
resolved the tension that had weighed on Rome’s relationship with
Berlin in recent weeks.
The Italian premier
arrived in Germany Friday seeking Merkel’s backing for more
“flexibility” in the European Commission’s analysis of its
finances. He appeared to have achieved that aim, as the German leader
praised Renzi’s reform agenda and the recent progress he has made.
“We can see step
by step that this agenda is being implemented,” she said, adding
that the reform process in Italy was moving “in exactly the right
direction.”
“This is an
important contribution for the future of Italy and an important for
the future of Europe,” she added at the conclusion of a meeting
that lasted an hour longer than scheduled.
Merkel was keen to
avoid an open dispute with Italy at a time when the refugee crisis is
testing her leadership at home and in the EU. Berlin also viewed
Renzi’s recent harsh tone as a tactic to win Merkel’s quiet
endorsement for his fiscal maneuvers.
But Merkel also
appeared to have gotten what she wanted from Renzi. Italy has been
blocking €3billion euro in EU aid to help Turkey cope the with the
refugee crisis. The money is the centerpiece of a broader agreement
between the EU and Ankara reached in late November. Merkel views
Turkey as the linchpin to her effort to reduce the flow of refugees
into Germany.
Without the aid,
however, Ankara is unlikely to take steps to stem the flow.
Renzi said Italy was
prepared to do its part and the aid should be approved within days.
“Italy has said
yes,” he said, adding that “it would please” him if the aid
could be released before a donors’ conference for the refugees in
London set for next week. He blamed the delay on the Commission,
which he said had yet to prove Italy with technical information on
the agreement that it had requested.
Friday’s meeting
was viewed as crucial for both sides. Renzi has been pelting Berlin
with accusations for weeks, complaining about its slavish devotion to
austerity policies and what Rome regards as its hegemony in EU
decision-making.
Italy is preparing
for a Commission review of its state finances and is seeking more
leeway in the evaluation. Italy has Europe’s biggest debt burden
after Greece and is under pressure to reduce it. A failure to comply
could result in sanctions.
But Renzi faces as
series of municipal elections next year and a crucial referendum on a
government overhaul in the fall. To prevail against a rising populist
tide, he needs to more flexibility than Europe’s fiscal rules
allow.
“The mountain of
debt needs to be reduced. Everyone knows that,” Renzi said. “I’m
not saying that to flatter Angela but for my children and my
children’s children… But austerity alone won’t work.”
While the German
leader didn’t state outright that the EU should show Italy leniency
in its evaluation, she hinted that Berlin wouldn’t stand in its
way. Merkel stressed that it was up to the Commission do determine
how much flexibility was merited when evaluating Italy’s finances.
“Fortunately it is
up to the Commission to offer its interpretation and I’m not going
to get involved,” she said.
The two leaders
displayed what appeared to be genuine amity after their meeting,
stressing that they agreed on most issues, despite their differences
on economic policy.
Renzi, recounting a
recent dinner between his and Merkel’s families, said he shared her
view that Europe needed to show more pride in its past and optimism
about its future.
“I think Italy and
Germany are going to defend Europe,” the Italian premier said at
one point. “We may not agree on everything but at least we discuss
our differences with a smile.”
Authors:
Matthew Karnitschnig
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