Friday, 30 Jul 2021

Will EU ever learn? German politician says EU should be tougher on debt rebels like Italy

Günther Oettinger, a German politician who served as a European Commissioner from 2010-2019, has said the EU needed to be even stricter on rebel states. He said the bloc, which is known for imposing tough policies on its members, was to blame for allowing Italy to accumulate so much debt.

Mr Oettinger told German newspaper Neue Zürcher Zeitung (NZZ) the European Commission needed to be stricter on Italy to help reduce its debt, which currently stands at about 135 percent of the country’s GDP.

The politician, who has held several roles within the Commission, said lessons needed to learn from the current coronavirus pandemic, particularly regarding the economy.

He said: “One thing must be clear: in good years with economic growth, the public sector must finance itself from income, through taxes, fees, levies and contributions instead of through new loans.

“In good years, on the contrary, it is even advisable to build up reserves or pay off old debts in order to be better prepared for crises like the current one, but also for normal recessions.”

The final point appears to be a direct dig at Italy, who failed to reduce its national debt during the seven “economically good years” between 2013-2019.

He said: “In these seven years, most of the EU member states have reduced debt – by not having new debts and by the growth of the economy.

“Italy, on the other hand, has barely grown and has made new debts, albeit moderately.”

As a result, Mr Oettinger believed the EU should have imposed even stricter measures on Italy.

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He said: “Dealing with Italy in these seven good years was not done the right way: When Mario Monti was in power, it was said that this is a friend of Europe, we have to support him, we cannot be more strict.

“A similar argument was made when Matteo Renzi and Paolo Gentiloni governed.

“Then came Matteo Salvini, and in Brussels, it was said that we cannot be stricter so that he doesn’t get any stronger.

“We were not consistent enough to admonish the Italians.”

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The German politician also revealed he clashed with former European Commission President Jean-Claude Juncker on the matter.

He said: “I actually always got on very well with the then President of the Commission, Jean-Claude Juncker, but we had several disputes on this subject because I felt that a more consistent approach by the EU and the euro area was urgently needed.”

When discussing the current coronavirus pandemic, Mr Oettinger said the crisis was not unique to the European Union and attempted to downplay reports of infighting between member states.

He instead praised the EU for announcing a financial package last week.

He said: “The package, which the EU finance ministers agreed on Thursday, includes three short-term financial instruments.

“It was a difficult birth, but it shows Europe’s ability to act and its willingness to show solidarity.”

Additional reporting by Monika Pallenberg

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