Rehn blasted for saying Berlusconi didn't respect EU pledges
European commissioner accused of interfering in election29 January, 17:16
Berlusconi resigned as prime minister in November 2011 when Italy's debt crisis threatened to spiral out of control, making way for outgoing Premier Mario Monti's emergency technocrat administration.
In the months leading up to his resignation, Berlusconi's government was involved in tense negotiations with the European Commission over the measures Italy needed to take to emerge from the crisis. Rehn said the demise of Berlusconi's third government showed looser fiscal policy would not help countries embroiled in the eurozone crisis.
"Italy made some promises of fiscal consolidation in the middle of the summer (of 2011), in part to facilitate the European Central Bank's intervention with its programme of buying bonds on the secondary market," Rehn said.
"The commitment started, the ECB intervened and for a brief period, the situation improved.
"But in the autumn (of 2011) Berlusconi's government decided not to respect Italy's commitments any more and the result was the drying up of loans, which suffocated growth...
"This situation led to the political crisis and the Monti government".
The commissioner added that since then Italy has regained the confidence of the money markets, following austerity measures and economic reforms introduced by Monti, and borrowing costs have come down.
"This is an example of the effect of confidence in action," said Rehn.
Berlusconi is leading the centre right's campaign for next month's Italian election, although he has said he will not be premier if his coalition wins.
Rehn's comments provoked an angry reaction from Berlusconi's People of Freedom (PdL) party.
"It's unacceptable that Olli Rehn, the vice-president of an independent institution like the European Commission, should intervene in the election campaign of a member state, and should do so with false, technically incorrect statements that are easy to refute," said PdL Secretary Angelino Alfano. "Such clear interference undermines the image of the European Commission and encourages populism and anti-European feelings at a delicate time for relations between the EU and the public of the individual countries". Industry Commissioner Antonio Tajani, an Italian who is a member of the PdL and one of the five EC vice-presidents, like Rehn, was angry too. "I disassociate myself from the statement about Italy by my colleague Olli Rehn, which threatens to make the European Commission appear not to be independent, and I am sorry about it," said Tajani. Renato Brunetta, the civil service minister in Berlusconi's 2008-2011 government, said Rehn's comments defamed Italy and called for a European Parliament inquiry.
The centre right is second in the polls behind Pier Luigi Bersani's centre-left coalition, although a media blitz by Berlusconi in recent weeks has narrowed the gap considerably.
Monti is also standing on a reform ticket backed by centrist parties that is vying for third place in the polls at the moment with comedian Beppe Grillo's anti-establishment Five Star Movement.