Channel NewsAsia

Renzi says EU at crossroads, defies "high priests of austerity"

Italy's Matteo Renzi called for a shake-up in Europe's approach to growth on Tuesday, warning that "high priests of austerity" and rigidity on rules were hampering efforts to combat euroscepticism and unemployment.

ROME: Italy's Matteo Renzi called for a shake-up in Europe's approach to growth on Tuesday, warning that "high priests of austerity" and rigidity on rules were hampering efforts to combat euroscepticism and unemployment.

"If Europe does not change course there will be no growth," Prime Minister Renzi said at a speech to parliament

He warned the "high priests and prophets of austerity" that "there can be no stability possible if there is no growth."

The premier, who was outlining his priorities for Italy's upcoming EU presidency, promised Rome would "respect the rules" concerning the EU-agreed deficit ceiling to 3.0 per cent.

But said "we want to stop being forced to follow a checklist of things to do, an approach which turns Europe into a boring old aunt."

The dynamic 39-year-old, who came to power after ousting his predecessor in February for failing to boost growth, said the euro had "been given the task of building Europe ... but the single currency is not enough."

"We are at a crossroads. It's not enough to have a common currency, a president or a common source of financing," he said.

Renzi, who has pushing for a softening in the German-inspired austerity policies that Brussels has pushed in recent years, said Italy was not asking for a relaxation of EU budget rules "but there are different ways of approaching rules."

His comments came amid a fresh debate over an easing of EU fiscal rules, with German Finance Minister Wolfgang Schaeuble warning that running up new debt would be "the worst possible" thing to do.

Defenders of the stricter rules, mostly the EU's richer countries to the north, are wary of reversing course, and suspect the calls to change them are thinly-veiled efforts to make room for renewed public over-spending.

Data released on Monday showed that Eurozone business activity slipped for the second month running in June, suggesting a modest recovery could be stalling.

Renzi said the 28-member bloc must now answer the question "what is Europe today?"

"Today Europe is boredom ... it is submerged by numbers and without soul," he said.

"Either we accept that we share common values, or you can keep your currency and we'll keep our values," he said, giving immigration and the rescue of boat refugees washing up on Italy from Africa as an example of a key issue for the upcoming presidency.

He also stressed the urgency for the EU to "take up the battle against youth unemployment", which in Italy stands at over 40 per cent.

The jobless rate among youths across the crisis-hit zone dipped by 0.1 points to 23.5 per cent in April, figures released this month showed.

Tweet Photos, Videos and Update on this Story to  #cna