Rome – As the crisis gathers pace, Italy needs to build something of fundamental importance to global stability: the move from a monetary and financial eurozone to the integration of fiscal and budgetary policies. And the next stage should be a review of security and defence policies. Fresh from a visit to Paris, Italian Foreign Minister Giulio Terzi di Sant’Agata reports on developments in the eurozone crisis on the day when Prime Minister Monti is meeting Merkel in Berlin. Perceptions on the diplomatic front are obviously in tune. “Alain Juppé asked me outright: ‘how on earth did you manage, in such a short time, to reform the pension system? We’ve been discussing this issue fruitlessly in France for 7 or 8 years now…’”
You’ve said, Minister, that the response to Italian’s ability to react to a crisis which, to a certain degree, we helped create, has been one of surprise…
“Yes, respect and even admiration for our ability to take prompt and decisive action”.
But will Italy manage to convince Angela Merkel to abandon the rigid budgetary approach and encourage growth?
“We are in an situation that is unprecedented in Europe’s long history. The only possible comparison is perhaps the Single Act, which saw a step change from a customs union to a common market that, in embryonic form, also included political coordination. A change that has been metabolised over time, while Italy is once more playing a leading role here: playing on its own behalf and on Europe’s, in a dizzyingly tight timescale”.
Indeed, it’s no simple matter. Will we succeed?
“Italy is playing the lead role in these negotiations. Right now, in view of the meeting with Merkel and Sarkozy in Rome, the key point is European solidarity. I felt that solidarity at my meeting with Alain Juppé, as did Prime Minister Monti when he saw Chancellor Merkel in Berlin. A solidarity that now needs to evolve into awareness and take concrete form in the fiscal compact, with funding authorised by the European Stability Mechanism. It must become Europe’s response to the markets, the ‘firewall’. In other words, Europe needs Italy, and it is vital for our European partners’ to give a uniform response that meets us half-way and then proceeds in the same direction”.
Having received public praise from Merkel, Monti went on to say that he expects lower interest rates – a reference to the growth question. What’s the state of progress on the negotiations for the new Treaty?
“At the technical level the talks are moving at a brisk pace and will be completed in time for the Council on 30 January. We have no particular problems as far as the balanced-budget rule is concerned – we agree with and are following the German position on this, and thus reassuring the markets. For Italy, the most sensitive point concerns the rate of reduction of the public debt. The goal of reducing excess debt above 60% of GDP by 1/20th per annum already exists. But if we interpret that rule rigidly and in a purely mechanical manner then grave recessionary effects would not be slow to follow. In short, the medicine of recovery could kill the patient, and that’s not in anyone’s interest here in Europe.
And then there’s the need for a balance between fiscal discipline and growth, and between fiscal discipline and sound stabilisation mechanisms. We have allies on this point: France, and Germany, which is adopting a realistic approach. The fact that a European Council has been convened in late January specifically to discuss growth and employment supports our positions”.
You’ll soon be visiting London. Will you be salvaging the negotiations with the English?
“Well, we’d obviously have preferred a 27-country agreement but we’ve stuck to the principle whereby the new Treaty should be integrated with the existing EU treaties as soon as possible. We’ll see, after Monti’s meeting with Cameron, and my own with Hague on 26 January. With France, on the other hand, I saw that we have a very close relationship and our views converge closely. We’ve got French support and, quite apart from the negotiations on the fiscal compact, we share a common position on shifting two-thirds of the funds for the neighbourhood policy to the Mediterranean, our new budgetary proposal for 2014 to 2020. We’re equal partners with France once again”.
Can you satisfy our curiosity about one point in particular. It initially seemed that you and Monti would tackle the new Treaty dossier together. What’s happened since then? Is Monti following Europe, and you the rest of the world?
“It’s the Lisbon Treaty that entrusts 27-member-state negotiations to the heads of state or government in person. The Foreign Minister is in the front line on the Treaty and my constant contacts with the French, British, German and Danish Foreign Ministers are proceeding in parallel with the Prime Minister’s meetings. And of course there are other dossiers too. Alain Juppé and I discussed the EU budget, enlargement and the question of Serbia’s candidate status: here too, we’re fully in tune with the French, while the Germans have some reservations. And then there’s the Mediterranean policy and the white-hot situation in Syria”.
Minister, once the eurozone crisis has been resolved, will Europe undertake to achieve closer cohesion? Will Italy go on playing a leading role, or once the storm is over will we go back to our every-day routine and red tape?
“After we’ve achieved closer integration in our budgetary policies, I think we need to turn our attention to the security and defence chapter. Our current strategy dates back to 2008. Italy has led an initiative that in December saw the creation of an operational planning centre in Brussels, albeit one that is limited specifically to operations for the Horn of Africa, without duplicating NATO.
That’s a starting point: we need to move forward and build on it. Europe needs a common security and defence policy that complements NATO. It’s a step-change that’s also necessary for the Obama administration’s multilateral diplomacy programme. We Europeans need to take on increasing responsibility. We need to have a common defence policy and eventually become, for the United States, an equal partner on security issues too”.
