Italy's Letta: UK 'is EU's big risk'

 

Italian Prime Minister Enrico Letta spoke to the BBC's Gavin Hewitt

When Italian Prime Minister Enrico Letta visits London later today his words will be analysed closely. He is, at 46, a relatively young Italian leader.

He is open, a fluent English-speaker and pragmatic. He is precisely the kind of European leader that David Cameron will have to get on side if he is to have any chance of successfully renegotiating Britain's relationship with the EU.

Mr Letta describes himself as "very pro-European" and an optimist. He seizes on Croatia joining the EU and Latvia's intention to join the euro as evidence of the European success story.

He even brands the euro a success - and then he throws in a caveat. The European Union, he says, is close to a big risk. That risk, in his view, is Britain.

The exit of the United Kingdom, Mr Letta told me, "would be a disaster for Europe and it would be a very negative step also for the UK and for our common future".

He says the role Britain is playing in the European Union "is a very positive one".

He cites London's support for expanding the single market, for liberalising trade, for security and defence and for pushing for a big trade deal with the United States.

'More flexible Europe'

When I asked him whether Britain could win back significant powers he said: "It can be possible and it could be useful for us too."

He does not indicate what kind of powers Britain might be able to repatriate, but what he does say is that "we need a more flexible Europe".

"We can have a new treaty negotiation," he said, "for the UK to have a different link, but remaining on board and for Italy or other countries in the euro to have a more integrated eurozone".

It is a vision David Cameron will want to explore. To sell continued membership of the EU to the British public he will need to convince other leaders of the need for a more flexible Europe.

Mr Cameron has spoken at length to German Chancellor Angela Merkel. She says there could be room for some powers to be returned to the nation states from Brussels, as long as that included all 28 EU members. There could not be just opt-outs for Britain.

The Dutch, too, are exploring a looser relationship. In June the Dutch government produced a report on "subsidiarity"- on what powers can best be kept at national level.

"The Netherlands is convinced that the time of an 'ever-closer union' in every possible policy area is behind us," the report concluded.

In all this there is an opening to negotiate and that is why a leader like Enrico Letta will be listened to so attentively in London.

Italy's struggle

The priority, of course, for Mr Letta is the Italian economy, mired in recession. He is adamant that Italy will not need a bailout. Italy is one of the very few European countries with a deficit below 3% and has a primary surplus.

That doesn't disguise the depth of the Italian recession - the worst in 20 years - nor a debt-to-GDP ratio heading towards 130%.

Businesses are struggling to find credit and many are still owed thousands of euros by the Italian government. Youth unemployment is at 40%.

Enrico Letta agrees there is a risk that an entire generation might conclude that Europe cannot deliver. He describes youth unemployment as the "nightmare of my job". He says it risks creating an "exodus generation" which opts out.

He says he has adopted a plan of cutting labour taxes for employing young people, but he knows that everything depends on growth returning.

In the midst of the economic storm there are questions over how long his coalition will survive.

He is a centre-left leader in coalition with Silvio Berlusconi's party from the centre-right. At the end of the month the Italian Supreme Court will hear the final appeal of Mr Berlusconi against corruption charges.

If his appeal is rejected he risks being barred from holding public office. He and some of his closest supporters maintain he is the victim of a political conspiracy. They have described the magistrates as being "in a secret association whose members are not known".

Some of Mr Berlusconi's allies have threatened to bring down the coalition - although how that will influence the court is unclear. But Enrico Letta felt it necessary to warn that for foreign investors Italy had to demonstrate a complete separation between political and judicial power.

He is optimistic his coalition can survive, but he is also making it clear there will be no influencing of the legal process just to save his coalition partner.

Even with its deficit under control Italy is a reminder that the crisis in the eurozone is not over.

 
Gavin Hewitt Article written by Gavin Hewitt Gavin Hewitt Europe editor

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  • rate this
    +1

    Comment number 82.

    72.Donkzilla
    "The EU and the euro will come to our rescue". I doubt it, we didn't help bail out portugal/greece etc. And TBH the conditions of the bailout of the PIGGS has brought those nations to their knees,if you think austerity is bad in this country wait until you see the draconian conditions imposed by any EU bailout.3% deficit would require cuts of 100bil of our spending or 20%.No thanks

  • rate this
    +6

    Comment number 81.

    Here's a deal for Europe
    We stay in EU and pay you Billions every year and in return you take back all the Immigrants you've been sending here over the years.

  • rate this
    +2

    Comment number 80.

    77.I wish there was some way of removing xenophobia from this debate and focusing on the facts but it's never going to happen.
    --
    The facts are that the EU is bankrupt, none of the economies in the EU match and I am just glad we never joined the EURO. I can only guess that in 1998 you were on the EURO bandwagon saying the UK is finished outside the EURO- that never happened and was scaremongering.

  • rate this
    0

    Comment number 79.

    75.JasonEssex

    No different to UKs tax regime.
    Tax people into poverty, then pay hoards of other people to give back those taxes via various tax credits & benefits, after 1st creating mountains of paperwork & masses of jobs for the boys & girls.

  • rate this
    +2

    Comment number 78.

    44. Nick Funnell
    Almost half the EU's annual budget (E40bn) goes on the Single Farm Payment subsidy...

    Anyone out there still prepared to defend this reverse Robin Hood scam? Anyone?
    ---
    OK.
    E40Bn is about 0.4% of EU GDP. It is paid to maintain a ready and efficient farming capacity over 4million square km.
    With our British short-termism we would DEPEND on Africa for food.
    No thank you.

  • rate this
    0

    Comment number 77.

    I wish there was some way of removing xenophobia from this debate and focusing on the facts but it's never going to happen.
    I trust the EU more than the bunch of toffs in our parliament - ideas like the financial transaction tax show the EU looking out for us, ideas like the bedroom tax show our government does not care about those outside their cabal.

  • rate this
    0

    Comment number 76.

    Britain has the respect and ability to shape Europe to benefit itself as well as the rest of Europe. Unfortunately for too long it has wimped out and been satisfied by moaning and opt-outs. Forget just a trade union, that was the 70s. Come on Britain, wake up, step up and take the lead in building the real Europe fit for this Century. That's what Letta and everyone really wants.

  • rate this
    +4

    Comment number 75.

    70.Bruggeling
    We pay a net contribution of around 10bil a year, these contracts are part of the money we receive back. So its hardly a positive contribution, we basically pay the EU to pay us back with a huge amount skimmed off!

  • rate this
    0

    Comment number 74.

    OUT !

  • rate this
    +1

    Comment number 73.

    43.Paul
    I suspect you will find that peace in Europe has had more to do with Nuclear Deterrence and the large numbers of US troops and equipment stationed here over that time. In addition do Serbia, Bosnia, Kosovo et al ring any bells ?
    +++
    Despite many silly claims it was not EU which kept peace in Europe but NATO and US forces. But with US so much maligned it may decide to leave Europe.

  • rate this
    -14

    Comment number 72.

    UK banks are hanging over the edge of a cliff. When they fall, the UK will go to complete social chaos. The EU and the euro will come to our rescue.

    Not all anti-EU brigaders are morons, the smart ones only want to sabotage the EU, they want euro banks to fall first, so they can blame the EU for the coming social chaos. Anti-EU ringleaders know their reign of wealth and power is coming to an end.

  • rate this
    0

    Comment number 71.

    @ 8. Metzalin

    Those figures are incorrect as we receive a large rebate that offsets about a quarter of that.

  • rate this
    0

    Comment number 70.

    I wonder why the BBC never allows comments on positive news items on Europe. Like http://www.bbc.co.uk/news/science-environment-23313153.
    http://www.bbc.co.uk/news/uk-wales-20716036
    Anyone so naive to think the UK would get such contracts after leaving the EU... ?
    .

  • rate this
    +4

    Comment number 69.

    But if we leave what are we going to blame everything on?

  • rate this
    +1

    Comment number 68.

    No mention of UKIP. The BBC censor must be working hard.

    The flood gates have already opened and the EU is history!

  • rate this
    +1

    Comment number 67.

    The EU is in trouble, largely created by its endemic corruption, governments/businesses have cheated & other governments/businesses have gone along with them because it was profitable to do so.

    The EUs response to its failures is its plans to relatively non democratically forceably nail itself together. Personally I cannot see the EUs peoples accepting a forced EUSSR created from spun FEAR

  • rate this
    +2

    Comment number 66.

    The EU is the biggest con in western history. My EU-phile friends will say 'If it's so bad why do other countries want to join? Well out of 28 nations - 24 are NET BENEFICIARIES - they're hardly going to leave ! Needless to say we are a NET CONTRIBUTOR...why ? Does it buy us influence ? Not likely, when you have one vote out of 28 (soon to be 29!). EU is THE PROBLEM ...NOT the SOLUTION.

  • rate this
    +3

    Comment number 65.

    "The Netherlands is convinced that the time of an 'ever-closer union' in every possible policy area is behind us," the report concluded.

    And according to multiple. reports is a growing conviction not only in Netherlands but in many other EU countries.

    I don't know whether UE will be able to devolve back to EEC, but megalomaniac United States of Europe scheme is clearly a pipe dream.

  • rate this
    0

    Comment number 64.

    Some carefully chosen words there from Letta. The EU is a fine balancing act these days and it will be interesting to hear what is said by both leaders later (probably just the usual rhetoric, but you never know).

    Anyone else think he looks older than 46? I must be a youthful-looking 47 year old!

  • rate this
    +6

    Comment number 63.

    He can't well openly call the EU or Euro a failure - that'd be political suicide, even if he's right.

    Italy, unlike the UK, has a big manufacturing base; it will be a key player in rebuilding the European economy sooner or later, so to simply brand the man an idiot and disregard him would be very naive.

    In or out, we should consider his words; he could be a key ally whichever way we jump.

 

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