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DItalian Prime Minister Giuseppe Conte has been in attack mode for days: against the EU in its current state, but above all against the Netherlands and Germany. In numerous interviews with local and foreign media, Conte was repeatedly determined to fight “to the end” against the resistance in The Hague and Berlin.
It is concerned about so-called corona bonds: Conte demands that countries in the euro zone jointly issue bonds that will later benefit countries particularly affected by the coronavirus pandemic, especially Italy, Spain and France. At the summit of heads of state and government via video conference on Thursday, he assured him on several occasions that he will not stray from this demand.
It remains to be seen if he can resist. In his recent conversation with the “Süddeutsche Zeitung” on Monday, Conte declined to reveal whether he would be able to veto the summit if he could not prevail. There should be no dissent in the euro zone or in the EU as a whole which, given the unprecedented economic crisis as a result of the pandemic, now requires “all the firepower of the European Union”, as Conte said.
Conte accuses The Hague of “fiscal dumping”
At best, there is disagreement over the instruments by which the EU should direct long-promised amounts to particularly affected Member States. Regarding continued German resistance against the crown’s bonds, Conte said: “Not a single euro from the Germans will be used to pay Italian debts.” Rather, the solidarity demanded by Rome is “very specific and limited in time.”
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But Conte did not stop at the calm arguments. He accused Berlin of national egotism. Often each nation considers “only its advantages” and believes “to give more than it receives.” Germany is known to have “a large trade surplus for years” and is “criticized everywhere.” This surplus is “higher than the EU rules”, and with this surplus the German economy “does not serve as a locomotive for Europe, but as a brake.”
Conte accused the Dutch of “tax dumping”. With its lower corporate tax rates, the Netherlands “attracts thousands of large international corporations.” This ensures The Hague “a massive inflow of tax money”, which “then other countries in the Union are lacking.”
While the Madrid and Paris governments now appear to be moving away from building the corona bond controversy as a matter of survival for the EU, Conte is digging deeper and deeper into its trench. German diplomats in Rome had been convinced last week that the anti-German and Dutch tones of the head of government’s office and of various ministries were intended primarily for the internal political audience. In direct conversation, on the other hand, the Italian partners are conciliators and ready for dialogue.
Opposition from the coalition partner.
However, the question arises how Conte can still come to a compromise after the frontal attacks of the past few days without losing face. To this end, he is also being ousted from the ranks of his own left coalition. Conte’s immediate predecessor for the post of Prime Minister, the current EU Monetary Affairs Commissioner Paolo Gentiloni of the Italian Social Democrats, warned against “retrospective discussions” on controversial corona bonds.
The leader of the Social Democrats party, Nicola Zingaretti, had asked independent Prime Minister Conte last week to move away from his tough stance. If there was an opportunity to obtain the “billions for the health sector” in Italy “without conditions and with respect for Italian sovereignty,” “we should take these funds,” said Zingaretti.
The head of the formally smaller coalition partner was referring to the fact that Conte had refused to apply for a line of credit under the Eurozone Stability Mechanism (ESM) in the amount of € 35 billion, at least described it as “completely inadequate and insufficient”.
