Anger in Italy as EU officials 'laugh at Renzi'

BRUSSELS Fri Mar 21, 2014 7:40am EDT

Italy's Prime Minister Matteo Renzi smiles as he arrives to lead a news conference at Chigi palace in Rome March 12, 2014 file photo. REUTERS/Remo Casilli

Italy's Prime Minister Matteo Renzi smiles as he arrives to lead a news conference at Chigi palace in Rome March 12, 2014 file photo.

Credit: Reuters/Remo Casilli

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BRUSSELS (Reuters) - Italian media reacted angrily on Friday after senior European officials exchanged apparently ironic smiles at a news conference when asked if Rome may be granted extra flexibility on its budget targets.

European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy told journalists in Brussels that all countries would have to respect budget commitments.

They appeared to laugh slightly when asked if there could be room for Italy to fund growth-creation measures through deficit spending.

"No those smiles will not do at all," the Corriere della Sera, Italy's most influential daily, said in a front page editorial. "They are a gratuitous slap in the face. An offence that Italy does not deserve."

Rome daily Il Messaggero carried a similar front page editorial. "Enough. Enough with the laughter. Enough with the superiority complex towards Italy," it said.

"It has never been less justified, especially when you consider the status of the individuals who are laughing at us."

Van Rompuy's spokesman Dirk De Backer dismissed the controversy, saying it had been willfully taken the wrong way by the Italian press.

"It's a deliberate misinterpreting of a smile. Van Rompuy and Barroso only wanted to coordinate on who had to answer to the journalist. The stories in the press do not deserve further comments," he said.

Prime Minister Matteo Renzi has promised that Italy, struggling to emerge from its worst postwar recession, with unemployment at record levels, will meet all its budget commitments, including keeping its deficit under the EU cap of 3 percent of gross domestic product.

BERLIN, BRUSSELS AND BERLUSCONI

However he has pledged a series of measures including billions of euros in spending programs and tax cuts to revive growth that will push the deficit up to just within the limits.

He has also made clear he believes the budget restrictions should be overhauled, describing the 3 percent limit this week as "anachronistic".

The EU Commission has expressed concern that Italy was missing a target of keeping its structural budget deficit, adjusted for the business cycle, inside 0.5 percent even before Renzi announced last week that he wanted to increase borrowing.

The smiles by Barroso and Van Rompuy recalled a similar exchange of looks between German Chancellor Angela Merkel and former French President Nicholas Sarkozy at a European Council meeting in 2011 in response to a question about the then-prime minister Silvio Berlusconi.

"They're laughing at Renzi too," Il Giornale, a newspaper owned by the Berlusconi family, headlined its front page.

Berlusconi's center-right party has never forgotten the perceived slight and has brought it up repeatedly since then to support its argument that the billionaire media magnate was forced from office at the height of the euro zone debt crisis in 2011 by pressure from Berlin and Brussels.

On Thursday, Sandro Gozi, the undersecretary in charge of European Union Affairs, said that Italy wanted to see a discussion about granting extra room for maneuver on deficits to fund spending on infrastructure.

Italy's public debt is one of the highest in the euro zone at around 133 percent of GDP, but its deficit is within the limits of the Stability and Growth Pact and it runs a primary surplus, before interest rate payments.

(Writing by James Mackenzie; Editing by Tom Heneghan and Robin Pomeroy)

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