Italy to Brussels: Give Us More Money

Beggars and Choosers 

Newly elected Italian PM Enrico Letta is getting bolder and more assertive by the minute, judging by his remarks at a recent Berlin press conference. According to the FT, Letta said that a single European currency doesn’t do enough to promote economic growth in member countries. He stated that more political union is needed to help European economies thrive:

 “Now we have to make up for lost time. That time was lost because too many countries have looked at the next elections and by doing this they have made it harder to explain to citizens that they had to concede sovereignty,” Mr Letta said in a speech to the Italian senate.

“Our destiny as Europeans is common, otherwise it will be made up of individual countries that will slowly decline . . . in a world where the powers of countries with populations in their billions will prevail,” Mr Letta said.

In short, Letta is telling Berlin: all your money belongs to us. We earlier noted that Letta’s first speech to parliament pointed to an Italy ready to take a harder line with Europe. Many smart Italians think Germany has way overplayed its hand and that it will ultimately be forced to fold on austerity issues just as it was forced to fold on the ECB policy of accommodating the needs of debtor countries. The alternatives are just too expensive and dangerous. Given that belief, they think Italy has a strong hand and should play a more aggressive game.

It looks like Letta agrees, and he’s getting clearer and clearer about what he wants European policy to look like.