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.

Umaar Kazmi
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“They should be on bended knee apologising”: Chris Williamson warns Corbynsceptic Labour MPs

The MP for Derby North on his return to Parliament, why Labour won in marginal seats, and how party unity could have led to a Labour government.

At 5am on election morning, Chris Williamson was ceremonially tearing up some binbags. Two dustbin liners had been taped over the gold and green “Chris Williamson MP” sign on his Derby North constituency office since 2015. When it was announced that he’d won England’s most marginal constituency back from the Tories, he headed down to the old office with his team, and they tore the binbags down, dust raining upon them.

“Those black bin liners taped round were like a reminder whenever you glanced up that, one day, it’d be nice to pull that off,” he grins. In his two years away from the Commons, having been beaten by 41 votes last election, Williamson had been using the office as an advice centre.

Before then, the former bricklayer had represented the Midlands constituency from 2010 to 2015, having served as a local councillor – and twice as council leader – for two decades.


All photos: Umaar Kazmi​

Now he’s back, and squatting in a vegan-friendly café along the river from Parliament as he waits to be given an office. His signature flatcap sits on the table beside a glass of sparkling water.

“I’m not a fan of that place anyway, really, it’s horrible and oppressive, and not really fit for purpose,” he says. “That’s the slight downside. It goes with the territory I suppose. If we could move out of Westminster, that would be nice – somewhere like Birmingham or Manchester or Derby even – the centre of the country, isn’t it?”

“New Labour’s dead, buried and finished”

Perhaps this distaste for the bubble is to be expected, as Williamson is an ardent Corbynite. I followed him on the campaign trail before the election, and he was championing Jeremy Corbyn’s policies and leadership on every doorstep. It seemed a rather brave move among many undecided voters at the time, but has now been vindicated. You can almost tell from his trainers, crumpled polo shirt and contended expression that Williamson is supremely comfortable in the most left-wing Labour party since he became an MP.

“New Labour’s dead,” he says, his eyes twinkling. “No doubt about that. It’s dead, buried and finished. It's a regrettable chapter in our history. Historians will think ‘my God, what were they doing?!’” he cries.

Williamson believes he won due to Jeremy Corbyn’s character, the manifesto, a “fantastic” local campaign, and an “outstanding” national campaign. He thanks Momentum activists rallying so many people that they often had 20 teams canvassing simultaneously in his seat. And he praises an online campaign that targeted different demographics – Ukip voters in particular would mention his videos.

“If they’d been more supportive then we’d have got over the line”

“We targeted some elements of our campaign to specific cohorts,” he says. “For example, we did a message online to people who had supported Ukip previously about how a Labour government would genuinely take back control, take on the corporations, bring back the utilities into public ownership – rather than controlled by international, global corporations many of which are ripping us off.”

Williamson adds that young people were enthused by the pledges to scrap tuition fees, abolish zero-hours contracts and raise the minimum wage. He also saw Tory voters switch, attracted by a policy programme that he describes as “common sense” rather than radical.

He admits that people warned him to “disassociate yourself from Jeremy if you’re going to win” when he began campaigning. But he tells me he would “have sooner lost than gone down that road”.

But he has strong words for those who were more sceptical, saying they “let down their members” and lamenting that “if they’d been more supportive over the intervening period, then we’d have probably got over the line”.

Williamson calls on all the Corbynsceptic MPs to apologise: “They should be down on their bended knees and apologising, in fact. Not just to Jeremy but to the entire Labour movement.”

However, he believes his party is “more united” now than it has been for the 41 years he’s been a member, and is happy to “move on” – expressing his gratitude for how much warmth he’s received from his MP colleagues, “given how critical I’ve been of them!”

It may be Chris Williamson’s time in the sun – or the “sunshine of socialism” as he puts it, quoting Keir Hardie – but he does have jitters about his majority. It is 2,015 – the digits matching the election year when he was defeated by the Tories. “It’s a reminder that we lost then!” he laughs.

> Now read Anoosh on the campaign trail in Derby North with Chris Williamson

Anoosh Chakelian is senior writer at the New Statesman.

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