MNI: Italy Pushes 'Third Way' For EU Reform To Halt Populists

By Silvia Marchetti

     ROME (MNI) - Italy is looking to pursue a 'third way' towards euro

governance reform, with the goal of uniting southern and northern members on a

common path, senior government officials have told Market News.

     Marco Piantini, EU Affairs adviser to premier Paolo Gentiloni, said Italy

is looking to break past current logjams. 

     "So far, Europe has been paralysed in a counterproductive debate over

fiscal rules," he said. 

     "We need to get over the dichotomy between pro-austerity and anti-austerity

stances by focusing on what all European members share. This can be done by

adopting a middle, intermediary path - a so-called 'third way'," he added.

     A 'third way' implies focusing reform efforts on building a central EU

fiscal capacity to fund 'common public goods' such as defence and security,

immigration challenges, an unemployment scheme and a rainy-day fund across the

bloc, alongside greater burden-sharing at all levels.

     --TURN BACK AUSTERITY

     The Gentiloni government believes concentrating reform efforts on how to

make the most of these "public European goods" enlarges the scope, as well as

boosting the convergence between countries, keeping at bay populism fuelled by

Europe's ongoing austerity debate. The third way option could also help overcome

the clash between hawks and doves. 

     "The problem of austerity is strictly tied to the fact that budgets today

are national. But if all peers share resources within a central budget, the

scenario changes. Existing treaties can be revised, it's an option. But this

'middle way' is the only one able to avoid Europe's disintegration," said

Piantini. 

     Rome has spearheaded the creation of a pro-reform Mediterranean League.

Although the 7 southern EU members -- France, Spain, Greece, Malta, Cyprus,

Portugal and Italy -- met recently, they stress it is not a closed shop and all

reform minded countries can join the platform. 

     Another government source stressed that the new Rome-Paris cooperation,

launched following a bilateral meeting in Rome between premier Gentiloni and

French president Emmanuel Macron, is complementary, not alternative, to the

Paris-Berlin axis. 

     --GERMAN SUPPORT NEEDED

     Germany's contribution to Europe's restyle remains crucial, said the second

official, especially now that Berlin has overcome a month-long political

stalemate and a new government could soon be formed. 

     "Without Germany's support, no thorough EU reform can be implemented. I am

confident that many thorny issues regarding Germany's opposition to greater

burden-sharing will be soon overcome, perhaps not in the short run, but the path

to follow has been marked," he said. 

     The fact that even former German finance minister Wolfgang Schauble

recently, albeit cautiously, opened up to the possibility of issuing eurobonds

to address the migrant crisis is seen by Rome as an important step forward. 

"Europe needs a strong Germany, for it is in the interest of all countries that

Berlin contributes to the eurozone's restyle," said the source. 

     According to the official, there is demand today for more and better Europe

coming from all (remaining 27) member states, which can be channelled towards a

common objective. 

     Italy heads towards its general election on March 4, with most parties

reviewing their European stances in order to lure swing voters. The election

outcome is uncertain, but Italy's permanence in Europe would never be at stake

no matter the outcome. 

     According to the official, each party has its own idea of what Europe is

and how it should be, but none will ever abandon it, saying "It's an acquired

reality, permanence in Europe is part of Italy's constitution. How can anyone

possibly undo that?" 

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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