South EU Summit: ‘Italy is back on track after the worst crisis since WWII’, is the message you sent internationally during the traditional end of the year press conference, prior to the dissolution of Parliament by President Mattarella and the calling for Parliamentary elections. Economic growth is at its best since before the Eurozone financial crisis, the debt has been stabilized, and strategic reforms have been pushed forward during this 5-year legislature under the leadership of the Democratic Party. However, there is a great deal of expectation regarding the electoral outcome, given the likelihood that this could translate into a hung parliament.
What have been the keys to catalysing the turnaround of the Italian economy and which sectors boast the greatest potential to lead future growth?
Prime Minister Paolo Gentiloni: The Italian economic performance has been better than expected: real figures and data turned out to be more positive than forecasts. During the crisis, Italy has been confronted with an extremely challenging economic environment. We had to reconcile boosting growth and promoting employment with high public debt – which inevitably implied very narrow financial resources – and a banking system that needed to be restructured. As for Italy’s strengths, since the end of WWII, its economic system has been characterized by a strong industrial basis. This sector will remain crucial in the near future, thanks to the Industry Plan 4.0. At the same time, our economy is traditionally export-led, thanks to a very dynamic fabric of SMEs. Our exports are now increasing at a sustained pace and I believe this will give an important input to our overall growth.
South EU Summit: You have openly appealed to parties to make realistic promises to voters. Looking ahead, what reforms or policies do you believe need be prioritized to leverage Italy’s current economic momentum and contribute to repair social divisions?
Prime Minister Paolo Gentiloni: Figures show that Italy is on the right path. We cannot afford to waste these positive results. On the contrary, we must do our utmost to consolidate and improve them. In other words, we need to continue along this path, but at a faster pace, and with a medium and long-term perspective. For instance, the Jobs Act has certainly played a fundamental role in increasing the flexibility of our labour market and in reducing unemployment. Now we should make this trend more structural, notably, by making the incentives to hire young workers more stable and stronger, and by reducing the North-South divide. Similarly, we intend to take further steps to improve the competitiveness of Italian enterprises, and more generally, of the Italian system. To this end, we should invest more in education, training and innovation, and do our best to lower the cost of labour through a reduction of the tax wedge.
South EU Summit: To what do you attribute the rise in Polls of the anti-establishment and Euroskeptic Five Star Movement? Do you believe there is reason for concern?
Prime Minister Paolo Gentiloni: We have seen a rise of Euro-skepticism and populism in almost all European countries. This is not an exclusively Italian phenomenon and is mainly the consequence of spreading fears connected to the uncertainties of globalisation, a poor economic performance, and the deepening of the migration challenge. But basically, none of the forces fueling and playing with these sentiments succeeded in conquering the majority of voters, or in forming governments in European countries. This means that the electorate, despite its evident sense of disappointment in some failures and weaknesses of the EU, still believes in the European integration process, and has appreciated the efforts that we have made to adopt reforms aimed at bringing the European construction closer to citizens, in response to their expectations to have stronger – not weaker – European policies. The message we should give is that we cannot eliminate all our structural problems with a magic wand, as some are inclined to promise; rather, we must be consistent and effective in proving to our public opinion that we are capable of managing challenges – and possibly turning them into new opportunities through more ambitious, more integrated European policies.
South EU Summit: You referred to last year’s informal EU Summit that commemorated the 60th anniversary since the signing of the Treaty of Rome, as a turning point for Europe. But it also served as a reminder of the importance of Italy as a pillar of European leadership. What role do you attribute to Italy within the wider context of the European Union?
Prime Minister Paolo Gentiloni: I thank you very much for this question, because I am indeed convinced that the Rome meeting of last March represented a turning point. Since then, we have gradually shifted from a narrative of crisis to a more positive agenda, based on reforms, to make Europe – and I quote the Rome Declaration – safe and secure, prosperous and sustainable, social and strong, in the global arena. Only a reformed Italy can fully develop its traditional role as a “European stability and integration provider”, as is natural for a founding member of the EU and one of its three strongest economies after Brexit. In the perspective of a European Union of 27, Italy must remain one of the key players in promoting a more robust and deeper integration process. This is in the interest of Europe itself. Italy is a member of the Eurozone and of the Schengen space, and has promoted the adoption of the new PESCO on security and defense and intends to be one of the leading countries for any initiative aimed at advancing the European project, even at “different speeds”, if necessary.
South EU Summit: Italy is the host of the first South EU Summit in 2018, bringing together 7 EU heads of state that jointly represent close to 40% of EU GDP and population. These strategic summits endeavor to act as a catalyst to increase EU cooperation, a pro-growth agenda – targeting investment and employment- as well as stronger EU coordination on joint challenges such as security and migration.
What does hosting the first Summit of the year mean to Italy, and to what do you attribute the evolution of the South EU Summit since its launch in Athens in 2016?
Prime Minister Paolo Gentiloni: We need to continue working in order to improve governance and further boost economic performance. 2018 will be a crucial year for Europe to consolidate growth and foster social inclusiveness, with a series of important meetings and appointments. The next European Councils will address crucial issues, such as the deepening of the EMU, migrations, asylum, and institutional reforms. We believe that the Summit in Rome should have an operational impact: we should send a clear message to our public opinion that we are committed to complete the EMU with the objective of combining risk sharing and risk reduction, to work for a true EU migration policy, to review our asylum policy based on the principles of solidarity and shared responsibility.
South EU Summit: How can regional cooperation between these 7 countries contribute to ultimately catalyse greater EU dialogue and cooperation?
Prime Minister Paolo Gentiloni: The seven Leaders who will meet in Rome are used to intense dialogue, despite their political affiliation. The positioning of their countries in the same geographic area often facilitates their convergence over many key issues, such as management of migration, growth and innovation, energy transition and environment protection, peace and security, fighting against terrorism. The seven members of the Group are firmly committed to these goals and will adopt a joint statement that will confirm their common stance. Therefore, we see the Rome meeting of a very cohesive group of EU Member States, as a most important step to gradually build consensus among the 27 on all these issues, in the interest of Europe.
South EU Summit: Establishing a united strategy to tackle the effects of migratory inflows has been a recurring theme during all of the past South EU Summits. How do you propose to move forward, bearing in mind the latest impasse at the EU Summit in December, coupled with targets set in the European Council agenda to reach an EU deal by June of this year?
Prime Minister Paolo Gentiloni: In 2017, the approach and policies adopted by Italy have proved to be effective and have brought about tangible results in terms of management and containment of irregular migration. New arrivals of migrants to Italy have decreased by 30% in 2017, and by 70% in the second semester of the year. The number of deaths at sea – which still represent an intolerable toll – have halved in the last 12 months. Yet, it would be a terrible mistake to believe that our job is over. This trend cannot be sustainable if Italy and other “frontline members” are left alone. The migration challenge is a very serious, deep, structural, and long-lasting challenge for the whole European continent. Only if we work together, and develop a common migration policy, can we transform migration into an opportunity. Our long-term goal must be to replace uncontrolled and illegal flows with more organized and regular channels of migration.
South EU Summit: It is believed that climate change, coupled by demographic trends and poverty, could translate into African migrant inflows of up to 100 million people. You have been a strong advocate for increased investment and cooperation in the African continent, an idea that is supported by other South EU Summit leaders. Can you elaborate on this vision and tell us what roadmap you propose?
Prime Minister Paolo Gentiloni: The relationship with Africa is a top priority of Italian foreign policy, not only in words but in deeds. One of the most significant outcomes of the G7 Summit in Taormina was the support of a model of sustainable development in Africa. After my trip to Angola, Ghana and Ivory Coast, on the occasion of the EU-Africa Summit last November, I participated in December in the Paris meeting of the Leaders of the countries committed to strengthen the so called “G5 Sahel” Force, and to this end Italy will soon launch a training mission in Niger. At the beginning of January, the Italian Minister of Foreign Affairs visited Niger, Senegal and Guinea. All these initiatives have a very clear common denominator and objective: to transform the traditional model of relations with Africa, based on assistance and exploitation, into a true partnership between equals. Africa has an enormous, untapped potential due to its resources, and especially to its youth. We want to help our African partners to develop this potential, in our own interest, but also with clear African ownership. A stable, democratic, modern and strong Africa can be a key catalyst for European economic and social development and would represent the best and most sustainable solution to the migration issue.
South EU Summit: The dialogue for the future of the Eurozone is at a crucial point, within the context of Brexit, the proposals recently submitted by French President Macron, taking into account the results of the German and Austrian elections, as well as the Catalonian debacle. You have emphasized that 2018 is the time to promote convergence in Europe.
What reforms do you believe need to be prioritized to promote greater European integration, in a way that is sustainable for its people, keeping at bay the dangerous forces of nationalism and secessionism?
Prime Minister Paolo Gentiloni: In recent years, the political debate at a European level has been focused quite exclusively on differences between Member States. We need instead to give voice to European citizens, who have more in common than we tend to say. Nationalism belongs to the past. Our priority has to be to work on the future. As Europeans, we have all the means to face the challenges of our time, and try to shape our society for the next decades. We need better infrastructures, stronger policies in areas such as defense, climate change, migration, and technology. That is why we propose to identify and promote that European public goods be funded through common resources. It is time to work on a roadmap to change the current way of financing the EU budget. We can and should have more economies of scale around the resources provided by the single market. Italy will continue to advocate a political union and the completion of the governance of the Eurozone, with instruments such as a Eurozone specific budget. Let me say it in a different way: the Monetary Union needs a system of democratic accountability with the possibility of preventing financial crises and macroeconomic imbalances.
