Italian premier Matteo Renzi is central to the maneuvering for the European Commission presidency. Photo: Getty
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Don't overlook Italy's PM in the European Commission power struggle

The tussle for the European Commission top-spot isn't just Cameron vs Juncker's supporters; Matteo Renzi, the Italian prime minister, is a key broker.

The hubbub and soap opera of who gets the European Commission presidency may have centred on a power struggle between David Cameron and the supporters of Jean-Claude Juncker, but it would be a mistake to overlook the rise of another man – Italian prime minister Matteo Renzi.

Renzi has only been in post since April, but by tying his support for a Juncker presidency to whether the conservative spitzenkandidat will agree to loosen the EU’s budgetary rules, he has emerged as a key broker.

He also has a strong hand to play. Renzi’s Democratic party scored a decisive victory in May’s European election poll, taking 31 of Italy’s 73 MEP seats, and he has strong support among public opinion and his government.

The EU’s stability and growth pact requires governments to keep budget deficits below 3 percent and debt levels to 60 percent. But despite years of austerity most EU countries have barely managed the 3 percent deficit limit, while average debt ratios have soared to over 90 percent of GDP.

It is unclear whether Renzi will demand a re-write or merely a generous reinterpretation of how the rules are applied, but the direction of travel is clear.

And it is gaining support.

Earlier this week, German economy minister and social democrat party leader Sigmar Gabriel, called on the implementation of the deficit rules to be relaxed, commenting that “countries that are embarking on reforms must have more time to cut their deficits, but it has to be binding.”

“This is what we intend to put up for debate in the weeks and months ahead as part of a reorganization of European policy,” he added.

Gabriel was quickly slapped down by Angela Merkel, and his boss in the finance ministry Wolfgang Schaueble, who insisted that 3 percent limit offers enough flexibility.

Meanwhile, Herman van Rompuy’s office were forced to scotch rumours that the European Council president was preparing a joint paper with Renzi on the issue.

But for all that, there is also sympathy among some EU officials with the difficulties faced by Italy and other countries, who are forcing through unpopular labour market reforms but are strait-jacketed by the pact’s rules from targeted stimulus measures.

As a result, both countries are locked into vicious spirals. Despite keeping within the EU’s deficit rules, a two year recession has pushed Italy’s debt burden to an eye-watering 130 percent, second in size only to Greece. There is also an awareness that as the bloc’s second and third largest economies, France and Italy fall into the ‘too big to fail’ category of countries in the eurozone.

But it was inevitable that the issue would be returned to. In 2010 and 2011, when the eurozone debt crisis was at its bleakest, many politicians were prepared to commit themselves to anything that made them look tough on deficits and tough on the causes of deficits.

The main ideological battle that was waged on these reforms, and ultimately won by Europe’s right back in 2011 and 2012, was on whether to give preferential treatment to public investment targeted at education, research and infrastructure projects.

Critics say that this so-called ‘golden rule’, encourages creative accounting and that the 3 percent threshold gives governments sufficient flexibility.

In contrast, the Keynesian school of thought argues that the 3 percent deficit limit enshrines austerity that, in many cases, will cause an economic recession to be deeper than need be. In the short-term spending cuts may help balance the books, but without investment they won’t lead to recovery.

But it is not just centre-left politicians who are clamouring to re-write the rules, or at least reinterpret the way they are applied. Conservatives in much of southern Europe find that years of pushing through painful austerity programmes have done little to improve their economic prospects.

That Renzi is spearheading this campaign alone is also indicative of France’s decline. When Francois Hollande became only France’s second Socialist president to be elected since the Fifth republic began, it was expected that he would become a badly needed figurehead for the European left, and a counterbalance to Berlin.

It has not happened. Instead Hollande has lurched between domestic election defeats and ever declining personal ratings. Struggling to meet its budget targets despite being given a two year extension, France would be one of the main beneficiaries from a loosening of the EU’s fiscal rules. But its voice post-European elections has been silenced.

Renzi’s gambit may not secure an immediate policy change, but it highlights his status as the leading centre-left politician on the EU stage, and is an important mark in the sand ahead of Italy’s six month presidency. His timing could hardly be better.

Photo: Getty Images
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I'm far from convinced by Cameron's plans for Syria

The Prime Minister has a plan for when the bombs drop. But what about after?

In the House of Commons today, the Prime Minister set out a powerful case for Britain to join air strikes against Isil in Syria.  Isil, he argued, poses a direct threat to Britain and its people, and Britain should not be in the business of “outsourcing our security to our allies”. And while he conceded that further airstrikes alone would not be sufficient to beat Isil, he made the case for an “Isil first” strategy – attacking Isil now, while continuing to do what we can diplomatically to help secure a lasting settlement for Syria in which Assad (eventually) plays no part.

I agreed with much of David Cameron’s analysis. And no-one should doubt either the murderous barbarism of Isil in the region, or the barbarism they foment and inspire in others across the world.  But at the end of his lengthy Q&A session with MPs, I remained unconvinced that UK involvement in airstrikes in Syria was the right option. Because the case for action has to be a case for action that has a chance of succeeding.  And David Cameron’s case contained neither a plan for winning the war, nor a plan for winning the peace.

The Prime Minister, along with military experts and analysts across the world, concedes that air strikes alone will not defeat Isil, and that (as in Iraq) ground forces are essential if we want to rid Syria of Isil. But what is the plan to assemble these ground forces so necessary for a successful mission?  David Cameron’s answer today was more a hope than a plan. He referred to “70,000 Syrian opposition fighters - principally the Free Syrian Army (FSA) – with whom we can co-ordinate attacks on Isil”.

But it is an illusion to think that these fighters can provide the ground forces needed to complement aerial bombardment of Isil.  Many commentators have begun to doubt whether the FSA continues to exist as a coherent operational entity over the past few months. Coralling the myriad rebel groups into a disciplined force capable of fighting and occupying Isil territory is a heroic ambition, not a plan. And previous efforts to mobilize the rebels against Isil have been utter failures. Last month the Americans abandoned a $500m programme to train and turn 5,400 rebel fighters into a disciplined force to fight Isil. They succeeded in training just 60 fighters. And there have been incidents of American-trained fighters giving some of their US-provided equipment to the Nusra Front, an affiliate of Al Qaeda.

Why has it proven so hard to co-opt rebel forces in the fight against Isil? Because most of the various rebel groups are fighting a war against Assad, not against Isil.  Syria’s civil war is gruesome and complex, but it is fundamentally a Civil War between Assad’s forces and a variety of opponents of Assad’s regime. It would be a mistake for Britain to base a case for military action against Isil on the hope that thousands of disparate rebel forces can be persuaded to change their enemy – especially when the evidence so far is that they won’t.

This is a plan for military action that, at present, looks highly unlikely to succeed.  But what of the plan for peace? David Cameron today argued for the separation of the immediate task at hand - to strike against Isil in Syria – from the longer-term ambition of achieving a settlement in Syria and removing Assad.  But for Isil to be beaten, the two cannot be separated. Because it is only by making progress in developing a credible and internationally-backed plan for a post-Assad Syria that we will persuade Syrian Sunnis that fighting Isil will not end up helping Assad win the Civil War.  If we want not only to rely on rebel Sunnis to provide ground troops against Isil, but also provide stable governance in Isil-occupied areas when the bombing stops, progress on a settlement to Syria’s Civil War is more not less urgent.  Without it, the reluctance of Syrian Sunnis to think that our fight is their fight will undermine the chances of military efforts to beat Isil and bring basic order to the regions they control. 

This points us towards doubling down on the progress that has already been made in Vienna: working with the USA, France, Syria’s neighbours and the Gulf states, as well as Russia and Iran. We need not just a combined approach to ending the conflict, but the prospect of a post-war Syria that offers a place for those whose cooperation we seek to defeat Isil. No doubt this will strike some as insufficient in the face of the horrors perpetrated by Isil. But I fear that if we want not just to take action against Isil but to defeat them and prevent their return, it offers a better chance of succeeding than David Cameron’s proposal today. 

Stewart Wood is a former Shadow Cabinet minister and adviser to Ed Miliband. He tweets as @StewartWood.